After looking at last night's chart I was fairly convinced we would get a bounce today, but not quite as big as the one we got. In one day we got back half of what we lost last week, and on volume, too. In fact, this would probably have qualified as a follow through day had this been day 4 of a rally attempt, but it is only day 2. About the best scenario for the bulls now is a light volume pullback from here, as it does appear we are at a minor resistance level, followed by another big high volume push. The bears, ironically, might be best served buy another big blast tomorrow and a drop in volume.
Crude oil has barely budged in the last week, which in the face of severe market volatility might be a plus. There is a slight divergence I see here and don't know what it means: MACD is rising, but MACD histogram (a deriative of MACD, which is itself a derivative) is falling. I guess we will find out in a few days if it foes mean anything.
Gold pulled back today after last week's breakout, still above the breakout point and working off an overbought RSI reading. GLD has a target price here (assuming the bottom pivot point is in the right place, which is debateable) of around 160, which translates to 1600 of gold bullion. I would not bet against it.
This is strange. The yield on the 10 year was up most of the day, as you would expect it too with the market screaming higher, but reversed midday and finished down, for no reason I can see and totally ignored by the stock market. It may have been a treasury auction today, but the only one i have scheduled was a 4 week bill auction, and I'm sure that didn't do it.
For a few weeks I have pondered whether or not the dollar was carving out a base here. I am starting to come to the conclusion that it is not, that is is forming a bearish wedge/pennant pattern here and is due for some more down side. A lot of somebodies might just be anticipating QE 3 coming.
The market had a very impressive rally today, but you have to wonder if it was too much too soon. We should find out in a few days.
I am not a financial professional, just a guy that trades my own account.
I am also not a musical professional, just a guy that makes music on the computer. Thus, two blogs, one trading and on musical.
And, no, the picture is not me, it is the late, great John Belushi, one of the inspirations for these blogs.
This blog is focused on technical analysis of stocks and markets, putting heavy emphasis on chart analysis. My trading style is derived primarily from my mentor, William "Yoda" O'Neil, and the focus here is on leading and breakout stocks, but all forms of trading are covered to some extent. Economic and political news that effects the market are also topics here, and the blog may occasionally become a platform for my political and philosophical ranting. I keep several spreadsheets on Google docs which track various aspects of the market and readers are welcome to vies and comment on them.
Google Docs Spreadsheets
There are several spreadsheet that I maintain on Google docs to track various watchlists and trends in the market.
1. The earnings list - a group of small and micro cap, low float stocks that have exhibited recent rapid earnings growth. They are modeled along the lines of William O'Neil's CAN SLIM system, but limited to small cap, highly volatile stocks.
2. The relative strength list - a group of stocks which are near 52 week highs and have shown an increase in average daily volume. The list is limited to the top 200 stocks according to my methodology, which will be detailed on one of the pages of the spreadsheet.
It can be accessed here, and is also updates weekly.
3. Relative strength by industry - Uses industry data from Finviz.com to track the percentage of stocks within each industry that are in the top 25% of the 52 week price range, looking for trends.