I've officially run out of things to say as the S&P nears completion of its fifth consecutive week in a sideways trading range. Hopefully this won't last too much longer...
Trend Table
| Trend | Nasdaq | S&P 500 | Russell 2000 |
|---|---|---|---|
| Long-Term | Up | Up | Up |
| Intermediate | Up | Up | Lat |
| Short-term | Up | Lat | Up |
(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
Lat Indicates a Lateral trend
*** I'm simply using the indices' relations to their 200, 50 and 10-day moving averages to tell me the long, intermediate and short-term trends, respectively.
Less than two weeks to the holidays so I say the trading range stays put...and no S-Claus rally this year either. Chinese pump and dumps are where the only action is lately. Jim
This market is brutal. Lots of intraday volatility but nothing showing up in the vix. False breakouts and breakdowns on the intraday charts every day. Here's a chart of the euro/dollar relationship that I mentioned in a previous post. It just lost the 1 year weekly uptrend. If the dollar breaks out in a big way, I think the market will drop 10% easy. Sorry it's not as clear as Mike's charts, but you'll get the point:
http://i303.photobucket.com/albums/nn152/robert_lessard/GAND_T7KHDemo.gif
The SPX 500 cash index has traded between 1085 and 1119 for the past twenty-two trading sessions. This index has traded to and never closed above the resistance level of 1100. December is a seasonally bullish month for the stock markets and a ten percent correction has not transpired since the TARP funds were released in March 2009. The stock markets will likely break out to the upside of the 1100 SPX resistance level and complete a Santa Rally.
Ok....so know we have two conflicting theories. My gut is telling me that the break will go down. Nothing scientific, but I noticed that my friends who have been long for months are getting itchy trigger fingers, and if the market breaks down the longs will be running for cover.
Good to read conflicting theories: spy going up, down and Mike thinks lat.
Thanks everyone. I wish there were more intellegent people posting here, often
LOL... I was waiting for a prediction. Is it exhausted in your view or just resting prior to pushing Santa up that rally ladder?
Michael, why do you prefer 5,3,3 STO with the indexes - isn't that a bit fast, prone to false readings?
Thanks for the great recaps. Jim
Jim,
Yes, they are fast and I often point that out. They always worked better for me when I was swing trading than slower settings, so I got used to them. But I probably have a quicker trigger finger than most. :-)
Thanks Mike,
I can see how useful the faster settings are for swing/day trading and know Alan Farley also uses 5,3,3 from a seminar I attended--for individual stocks. It's just that for the indexes it seems to me slow STO is better to avoid a one day shake out - SP500 14,3 sto shows not oversold, for example. We're likely going to have a down day today or next two days, but not a sell-off that would cause me to exit positions--IMHO (until 14,3 also confirms 5,3,3)
Thanks again--you're a good teacher! Jim