On my Thursday post, I explicitly stated that the market was forming a bull flag and that we had additional room for upside. Well, here you go. I also mentioned the coveted Force™ spike in that post. A +7% day is an example of a very powerful Force™ spike. If you didn’t read that post, then that’s your fault. Charts do tell.
Another thing: On my Wednesday post, I outlined the very distinct possibility of bullish broadening bottom wedges forming on every major index. We broke out of that pattern (sky blue lines on the 6-month charts). Don’t say I didn’t say anything. Once again, charts do tell.
I have my own personal beliefs about the Geithner plan, and I don’t have very nice comments to say on it or to him, so I won’t say them. Just be aware that there is no magical solution to a problem that was created for several decades. The purging of our financial and credit systems will take many years and it will not be solved immediately. Apparently there are many people that like to think so, but if you use some common sense, it’s not possible to fix something like this “quickly”.
Forget the political rhetoric from Obama, Geithner, etc. Obama has zero experience in economics and the financial markets. I doubt he even personally traded a single stock. Not to mention, all the cronies in his cabinet existed while the problem was being created into a bubble in the first place, and no one in a political position of power did anything meaningful in their power to stop it. Times were too good, and the economy was flourishing. Or so they thought.
On the 45-day chart, you can see the green channel drawn for the current rally since there is enough data to do so. The rally continues until it ends, basically. Currently, there is no indication of advanced distributional sell-offs (ADS). The down days that we’ve experienced are minor distributional corrections (MDC). There is no way I will be adding longs here and since there is no indication of an imminent breakdown, I cannot add shorts here either (as swing trades).
I’ll be back in long when we get a healthy correction or short if I sense a sell-off. If you haven’t read my weekend article, you definitely should.
YOU SURE NAILED IT! AS SOON AS WE BREAKOUT OF THE 800s levels.THE MARKET SPIKE UP AS IF SAINT WAS CHASING THEM FROM HELL. I can’t believe what I am reading is FREE! PRICELESS Technical analysis! THANKS again JOHN!
nice post, but what do you make of the lack of volume on the breakout. almost signals that this was not indeed a broadening bottom
that last chart (4 Bad Bear Markets) is stunning to say the least.
i am trying to patiently wait out this bear rally. we all see the next crash coming. but as to when, well if it were that easy, none of us here would need to work anymore.
I very much expected hell of a lot more volume for a 500 pt day. The broadening pattern is confirmed on the breakout, otherwise it’s a falling funnel on a breakdown.
stuck – I’m with you.
What i;ve heard posited is that Most of the MM’s were tipped off Sunday night (prob earlier) as to geithner’s specifics and the big moves were made premarket.
Then the retail side and the not so MM’s came in during normal trading hours. Hence, the relative low volume.
seems like we got a bull flag possibly forming. i am short btw but it could be in the works depending on the swings of tomorrow
pullbacks are shallow…..bulls waiting on a pull back to get long are stymied likewsie bears trying to cover can’t get lower prices. this market wants to go up.
Feb highs are going to get hit in short order and I expect that the Jan highs will be next up after the feb highs have been dealt with. this is going to get the market flat for the year sometime this spring.
looking around the globe you can see this unfolding in the SEAN markets notably Taiwan and Korea…..these markets are setting up to run at the Sep/Oct area from where the original Tsunami made land.
I agree anjing bau.
I think the bulls and bears both could agree and deep down know we are going ot be manipulated HIGHER. I was fighting the tape last week short and it was painful.
Today was similar to last week when wh had the flat day then followed up with the rally.
BEAR TRAP.
I’d appreciate if someone here could answer.
Why is there still a discrepancy (for example; e-mini high today of 821 while SnP high of 823…) between the e-mini’s and the SnP index?
It began when they rolled over the contracts but opex happened……I figured that they’d be equal by now?
Or do they just wait till the 2 equalize at some point?
The gap is getting smaller….