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Friday, September 3, 2010

Friday Weekly Charts

It seems like ages ago, but there was a time that 1105 served as a pivot point, throwing up nasty resistanceas it met the simple 200dma. Well, we are there again, and the moving average has barely budged since then. The market has been ramped in spectacular fashion, based on a not as bad as expected NFP report, and an obvious fore knowledge of the numbers by certain privileged market participants, who are now sitting on some big profits. The obvious target now is 1130, and we muct get above it before a substantail pullback if this market is to have any chance of getting out of the nearly 6 month range bound hell it has been in.

The somewhat bearish stance of last week's weekly chart has been erased, replaced by a tentative bullish stance. Tentative, because we are still below the 40 week average, and have failed at it twice before. Until we get through that there really isn't any reason to believe this rally will have legs, especially if we don't get volume. We will find out soon enough, as the volume should be coming back next week.

The Nasdaq fits quite nicely into it's range, and is still quite weak. Weekly stochastics have yet to get above 50, which shows weakness, bit also gives it some room to catch up. If this rally succeeds there is a real good chance this will outperform by quite a bit, and I would expect the market leadership to come largely from here. f not, the rally probably won't get far.

Thee Dow industrials, despite relative strength, also have not gotten above the 40 week line, and are also contending with a descending trend line. We will probably encounter pretty significant resistance here, unless somebody gets another tip off on good economic numbers.

The transports have done a reasonably good job of staying above the 40 week, and the 10 week has not crossed below it yet. This segment of the market has been quite strong, and may have been what kept us from going into a nasty bear market. Why, I have no idea.

The Russell 2000 did exactly what it needed to do, strengthen in time for a rally, It is now at the 40 week average, but really needs to get above 680 or so for this market to go anywhere. MACD is turning up, but stochastics are pretty weak here.

The market defended a criitical support area this week at a time when it could have easily broken it. We had yet another follow through day this week, so we are in another confirmed rally, which gives us a chance to find the leading stocks and prepare to jump on tem as they break out. It also means we start counting distribution days again, and with volume coming back next week, we might get some/

I will have the new highs update shortly.

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