I can’t say that we’re going to go up in a straight line, as there will be consolidations, but at the moment, we are likely to head higher over the next few days. Looking at a 15-day chart, we are in the 865-880 trading range on the SPX. Did you notice how symmetrical the chart is becoming? It means that we could be consolidating here before another breakout. It’s apparent that strong-handed longs will be holding their positions for a longer short-term period.
I signal some caution because we’ve been up for 4 days straight, and the chance of a down day is extremely high, but that shouldn’t bother you unless the majority of yesterday’s gains are wiped out. Before that happens, though, it’s important to identify a down day as a normal correction (pullback on low volume) or an all out meltdown (accelerated sell-off on high volume). A nice correction is the opportunity to add onto existing positions.
Make note that the 20, 30, and 50-day moving averages will provide support/resistance (on the 40-day chart). Use these MA’s as guides for today’s trading, because they will dictate the pullbacks and bounces.
We also have durable good orders (8:30AM EST), jobless claims (8:30AM EST) and new home sales (10:00AM EST) coming out today. The consensus for the durable goods is -2% with a range of -6% to +1.2%. The previous reading was -1%. The consensus for jobless claims is 575,000 with a range of 540,000 to 650,000, although I believe the whisper number is getting bigger every week. The previous reading was 589,000. Finally, the consensus for new home sales for Dec is 400,000 with a range of 350,000 to 410,000. The previous reading was 407,000.
Don’t forget that we have the GDP report coming out tomorrow. The expectation is -5.4% Q/Q change! The previous reading was -0.5%. The range is -7% to -3%. Terrible.
Totally wrong conclusion, however, buy to your heart’s content.
Short-term, DD, short-term. Relax.
Sorry, you’re wrong for the short and intermediate term. Simple suggestion…turn your chart upside down and tell me what you see? I think you’ll be quite surprised. Your welcome in advance.
No way we continue to bounce here, this current run up has no legs to it. DD is right we head back down here starting today.
Reverse head and shoulders? that was a question CA
Yeah I thats all I can make out to is an inverse complex H&S but thats bullish.
DEVILDOG;
Stand on you head and jerk off. Tell me what you see?
Um, I don’t know what I see when I turn the chart upside down. Maybe the chart is supposed to be read right side up?
So I’m glad I didn’t buy at the close yesterday, looking at today’s drop so far to the gap area (SPY). Do you guys think the gap gets penetrated?
I think I’m going long, with a stop at the top of the gap (around 86.07), but I’m not committed yet, I want to see the opening action.
DEVILDOG;
Look Chart Addict is not doing a market prediction. He is showing risk and price movement. How do you run your money? Do you use a dart board and upside down charts? Please tell us your method of madness. We could use some help from a pro like you.
CA is presenting price action with a reiteration of psychological/emotional factors. The market will go the way it goes.
Seems to me like the gap held. I jumped in a bit ago. Trend is still up.
let me go find my crystal ball & accompanying tea leaves.
Blow up, I told you what to do in my previous statement above. Also, due to your smart ass sarcasm I’m not telling you any more. If I was you I would take the Spaniard’s and CA’s input and go long here. The gap has held and you should probably go long.
The gap holding shouldn’t be the only decisive factor. A breakout from the gap’s high+fill is more important.
Um, I don’t know what I see when I turn the chart upside down. Maybe the chart is supposed to be read right side up?
LOL. Dry wit is the best wit.
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FWIW, looking at your chart right side up looks like a natural pullback to the mid 850’s was called for.
Odd, no?
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NOOOOOOOOOOOOOOOOOOO! Two of the iBC charters I follow daily have competing predictions.
Maybe they’re both right.
Devil Dog which way were you looking at the SDP chart…maybe you didn’t heed your own advice way back when….
Yesterday’s gap filling.
Filled, now we shall see what we shall see. Given the low volume, things aren’t looking good for the long term holders of SDY.
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Volume not convincing me we go to the abyss.
DEVILDOG;
The market is broke. Right now it is going down. The market is getting ready for a big up or down move. Until it tells up or down. I won’t trade. Sometimes you make the most money by not trading or hedging. I don’t need anybody to follow. I can fuck up with the best but that is far and few between.
bullish wedge breakout.
Whew!
I stayed in cash all week, and am glad I did.
Chart Addict:
Thanks for the brilliant post (on The Fly side):
http://i40.photobucket.com/albums/e229/pandem1c/News%205/News6/margaret1w-2.jpg
I love women more than money…
I only wish I had a father to teach me the importance at the time:
1.) Money first.
2.) Women second.
p.s.:Not that I have been deprived (by ANY means!)
🙂