The SPX seems to be running into resistance at pretty even intervals (I fudged the middle one a little to make it fit), but those resistance levels aren't lasting too long. 1332 is going to be pretty key, and we are starting to get overbought (above 80 on stochastics is considered overbought, but it looks to me like we have spent more time over 80 than under in the last 6 months). MACD is still going up, slowing down just slightly today. We could roll over at any time, but so far this market refuses to die. We are still waiting for a follow through day call from IBD, and they have pointed out several times that all major up moves start with one. If we don't get it, this move will end soon.
Did you notice the usual last minute sell off in the SPX and Dow? Did you also notice it didn;t happen on the Nasdaq? Things like that usually mean something, although looking at the chart, the Nasdaq was nowhere near resistance, so maybe it doesn't mean something. It is still strange to see the SPX drop 4 points while the Nasdaq barely budges, but that could be bullish sign.
The Russell 2000 also did not sell off, but it just broke through resistance. It should next encoun ter some resistance at about 850, which I believe may be an all time high. The technicals say this has more upside to go.
The percentage of stocks above the Nasdaq above the 50dma. Above 50 we are in the bullish zone, below 30 is the bearish zone, and between 30 and 50 is a transition zone. The barely went into the bearish zone, which says that the correction we just experienced was not a real correction, more of a market hiccup. When it gets above 70 we start looking for a trend reversal, and this isn;t anywhere near there now.
On the NYSE the levels are probably not quite the same: I have been giving it a 10 point fudge factor which has worked reasonably well. We did dip pretty deep into bearish territory, but were not there long enough for me to consider it a real correction. That means one of two things: 1) another correction is coming soon; or 2) the power of money printing is a hell of a lot more than I have been giving it credit for.
As far as I know IBD still has the market in a correction. I have no reason whatsoever to doubt their judgement (and when I have in the past, I had my head handed to me), but I am cautiously getting back into the market here. We still have several leading stocks holding up well, and a few moving up, so it might pay to anticipate another move up.
I will have the new highs update shortly.
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