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Friday, November 12, 2010

Friday Weekly Charts

Oh, my, look at this. We got a sell signal on the elder impulse system today, the first one in nearly two and a half is normally pretty reliable, and usually good for at least a few days of down trend. We are sitting right on the support level at 1200, and appear to be esatblishing a new trading range, with a new bottom at 1173, with the 50dma rushing up to meet it. I suspect we are going to pulle back to just about that area.

Had it not been for today;s big drop, the weekly chart would have been quite a bore, not that it is that thrilling right now. We got our first real down week in quite a while, but volume was not that significant. We failed at the pivot point of the trading range I have for this after a breakout last week, but that may be just enough to give the market more ammunition for another move up, but I can;t help but feeling we are overdue for a test of the 10 week average, and i think we will get it.

The Nasdaq is even more extended, and the 10 week average is nearly vertical. This did get fairly significant volume this week. The ultimate target I have for this, should it break out of here, is just about where the 2007 high was. Incredible.

The Dow industrials, even if they do hit their target, won;t even get to the 2008 high. I think a correction here to the lower pivot point is the most probable scenario for the next week or so.

Ditto for the transports, and their range is even smaller. There really isn't much going on here.

The poor Russell 2000 has yet to break out, so talking about upside targets here is pretty moot. These have strengthened a bit in the last few days, and are holding up quite well in this latest pullback. A strong breakout here will be very bullish, but it doesn't look ready yet for an attempt. I will be watching to see how this behaves if we do go into a small correction. this was the first out of the box at the star of the rally that is almost ended, and probably will be the first out on the next one.

Has the euphoria over QE worn off, or has the market been slapped with a dose of reality? It's too early to tell, and we have a lot of room before we challenge significant support.

I will have the new highs update shortly.

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