Finally…some direction in the market. I didn’t expect the market to extend so far into the close. I know this tight range has been pissing a lot of people off. We accomplished several things today that are very important:
1) We broke out of the narrow range and formed a Rising Five Method, a knock off of the Rising Three Method (I don’t know if that secondary continuation pattern exists, but I just gave a name for it).
2) Today’s volume exceeded the volume levels for the past five days. However, it’s nowhere near the breakout levels that I wished to see. The volume must be maintained in subsequent days. I do not want to see a fall off in volume.
3) We re-entered the 880-920 range after having threatened to breakdown the past 2 days. This is considered a neutral move, but more bullish for today’s action.
4) We are above the 50-day MA on all three indices. The SPX and DJIA are clearly above while the COMP is 2 points above the 50-day MA. However, just because we closed above it doesn’t mean that it gets easier from here. There needs to be incoming momentum to fuel this rally or it’s dead.
5) The ascending wedge (COMP) and the ascending triangles (SPX, DJIA) now have the highest chances of breaking out (920+ SPX) to the upside. As long as the market doesn’t drop -2.5% or more, the bulls should be ok.
6) Financials led the rally. The banks were the big buys today. (3:09PM – Add 25% financial longs order issued). Of course, they’re going to benefit the most from the Fed’s actions, now and in the future. The 2nd best sector was the industrial/materials sector combo.
Some Concerns:
1) Oil lagged. I’d like to see oil move in tandem with the market to support the rally. A further decline in oil will obviously impact the strength of the rally. Massive volume spikes the past several days suggests that a decline in oil may come to a short-term halt.
2) This is still a bear market rally. Don’t get caught with your pants down.
Interesting. You know how CNBC started those “I am CNBC” self-promotion commercials? Well, as I write this, I heard that Melissa Francis is a “a Harvard grad…an anchor…a frustrated hip-hop artist?”. Please. That’s ridiculous.
In other news, I think Rebecca Jarvis looks like this warrior elf:
Similar?
Anyway, the possibility of a pullback to 902 or even as far as 882 on the SPX is possible. If we break above 920, we would have cleared almost every major resistance level until 950. Looking at the 10-day chart, we can see that the SPX is sitting right on near-term support at 910. I have no idea what to do until I see the first 15-30 mins of the open. If we get a major gap up or down, that could change my assessment.
The bottomline is that a move like this cannot be ignored. This was obviously a powerful move and technically pleasing to my eyes. This could be the beginning of a measured move up. Don’t forget that we have earnings from MS, CAG, GIS, CMC, JOYG, APOG, NKE, PAYX, TTWO, and a few others. Before we get too excited, keep in mind that the auto bailout has not yet been resolved.
Support levels for the SPX are 909, 905, and 887-900. Near-term resistance is at 920, which will be tough to crack. Enjoy the rally, but be ready to bail if things look bad. This is still a short-term trader’s market. Remain flexible, or you will lose money and end this year empty-handed. Not good for the Christmas spirit.
SPX 1-day
SPX 3-day
SPX 5-day
SPX 10-day
SPX 6-month
Nice Summary as usual.
Like that five day rising schlong, or whatever. Does the fifth day have to rise above the first for it to be legit?
__________
Resistance at 912 and 935 … support at 848 then 789.
Resistance is futile. You will be assimilated. De-banked of coin. Collectivized.
Jake – yes
E8 – Thanks. I’m not trying to think about support that far down unless it’s needed!
VIX hourly looks like a support breakdown, the 30/50 MA cross is ahead on SPX but behind on VIX. Oh oh here comes Gio to fade me run for it
Lol. No aumana, Vix still looks like it can drop a little more. Just probably not a good time to enter new longs, imo. I pointed out that we only had one Vix spike down, which increases the probability of a reversal drastically (if you checked my post, I mentioned entering longs at Vix > 60). But I’m more conservative, waiting for the next spike down into the 40s (Fib level @ 45). I’m thinking Friday’s influx of volume from quadruple witching will give me that spike down. u can scalp longs here, just be careful, I already have a few leadership slowing down.
-gio-
Today was horrifying. I will never buy rubbery wal-mart cheese again. I also have a newfound respect for those who have to squeeze large objects through small holes. I had trouble walking after my trip to the toilet today.
On a lighter note, it looks like the S & P is creating a rising wedge at the moment. Tomorrow’s action will be crucial. A break in the trend line could be fatal to the current rally attempt. A breakout above the wedge’s horizontal roof is also trade-able. Either way, tomorrow’s action is likely to be violent, one way or another.
It’s time to Ride the Bucking Bronco.
excellent summary C-addict. i do hope oil jumps on this rally as well. you would think we would have hit rock bottom. the fact is that a 3 Million barrel cut would have surprised… The market already expected 2 M.
being that i am stuck with DXO, i hope oil at least picks up… so i can dump it.