Market Update: Feb 8, '12

Bulls definitely starting to push their luck. Highly overbought readings portend potential sharp short-term reversal.

S&P-500 Large Cap Index

SPX gained 3pts (0.2%), after trading in a tight 10-pt range around the flat line. The index continues to confront the long-term resistance zone between 1345 and 1365. RSI has reached the 75-mark: highly overbought, without doubt.

Dow Jones Industrial Average

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Market Update: Feb 7, '12

Bulls definitely starting to push their luck. Highly overbought readings portend potential sharp short-term reversal.

S&P-500 Large Cap Index

SPX traded within a similar range to the one it traded in yesterday, before closing slightly higher. Overbought conditions persist. There are still no bonafide sell signals on this index, yet caution needs to be maintained, given the levels RSI and MACD have reached.

Dow Jones Industrial Average

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The Bigger Picture (Weekly Market Update): Feb 5, '12

SPX and INDU set to challenge major resistance, in the coming week.

S&P-500 index daily chart:

SPX gained a decent 19pts (1.5%), on Friday. That was an impressive move both in isolation but also within the bigger picture. It was starting to look like a minor correction was afoot, until Friday's move. But now the upper Bollinger band has been pushed upwards and that opens up more room to the upside. RSI has moved into overbought territory though and will need to be kept an eye on. The bulls should be feeling quite comfortable, however, because there are no sell signals on the chart, at present.

Dow Jones Industrials Average daily chart:

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Market Update: Feb 2, '12

Retesting highs.

S&P-500 Large Cap Index

 

SPX traded within a very tight range and closed with a miniscule gain of 1pt (0.1%), today. The upper band has possibly started to rise again but at a very slow clip. Furthermore, there is the potential for a negative divergence on RSI and on MACD, if resistance is found just above the most recent high.

Dow Jones Industrial Average

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Market Update: Feb 1, '12

Minor correction complete?

S&P-500 Large Cap Index

SPX gained 12pts (0.9%), today. Interestingly, the upper Bollinger band might have started to point upwards again. A rise in the upper band is absolutely crucial, if the index is to eke out further gains immediately. The index tested the recent highs, intraday. Tomorrow's session could be crucial in determining whether the bull run is ongoing or complete; the trend in the upper band will be our primary focus.

Dow Jones Industrial Average

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Market Update: Jan 31, '12

Minor correction presumably ongoing.

S&P-500 Large Cap Index

SPX closed unchanged, after opening in positive territory and moving into negative territory, later in the day. The upper Bollinger has remained flat for the better part of a week and we can now expect it to provide resistance, if there is a move to the upside, over the next couple of sessions. In fact, there is reason to believe that a breaking of the 20dMA might be nigh. If so, we'd expect the index to fall to its lower band (currently 1269), over the ensuing week or two. Note that there is now a negative MA crossover (preliminary sell signal) on MACD.

Dow Jones Industrial Average

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Market Update: Jan 30, '12

Indices recover after testing 20dMA intraday.

S&P-500 Large Cap Index

SPX reversed course from a 16pt-drop to close with a loss of just 3pts (0.2%), today. It is evident that the 20dMA has supported the index for now. The question though is whether or not the minor correction that was expected is now complete or merely begun. (If the 20dMA is broken, the latter will be the more likely.)

Dow Jones Industrial Average

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Challenging Resistance; Sustained Breakout Could Lead to Explosive ST Move

The following piece was featured in Tuesday's Nightly Commentary piece in the Members' Lounge.

Good evening,

The markets traded within a very narrow range near yesterday's closing levels, today. That is to be seen as a big win for the bulls. As long as the indices are above their 20dMAs, the bulls will remain in charge.

One more day of moderately sized gains from current levels would push the indices to new highs on the minor and intermediate trend. If resistance (on SPX and NDX) is broken tomorrow, all levels of trend will be confirmed as bullish, once again. We've seen the indices break out to new highs three times over the preceding three months. On each of those occasions, they ended up turning back down after moving to slightly higher highs. 

This time around, there may be cause to believe that any breakout might lead to a larger leg of upward price action than occurred on each of the previous instances. One of the reasons for this is the fact that the current consolidation has taken place over a period of two to two-and-a-half months and over a larger price range. 

A lot of energy has been built-up within...

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Dow Set To Break Psychological 10000 Mark?

      Dow Industrials Hourly ChartDow 10000 has always been a bit of a magical number to the financial media and the casual investor.

From the point of view of the technical analyst, it is just another number like Dow 9253 is or Dow 10785.24, for that matter. But, on occasion, price levels that have previously had no significance whatsoever on the charts can provide resistance/support and/or get broken briefly, before a trend reversal occurs. It is uncanny, how psychological levels often act as such; as potential contrarion sell/buy signals, if you will.

Nevertheless, the motivation behind this posting is less about waxing philosophical about contrarionism and so on, than it is about a potential inverted head & shoulders formation (see head & shoulders bottom education article in 'The Study') on the hourly chart of the Dow Industrials. The formation happens to call for a move to ~10105, which of course would take the index across the psychological Dow 10000 mark, over the coming sessions, as long as...

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