If you have been mystified by the action of the market since the first of the year, behold the pivot points and be mystified no more. Here we are, at what the pivot points tell us the is the top limit (give or take a couple of points) of the month's range. Thar does not necessarily mean we are going lower, but it almost certainly means we aren;t going much higher.
This week we do have the annual pivots for 2013 calculated. They do not quite match the ones I calculated on the January 1st, which means they weren't calculated until after last Friday's close. No matter, the difference is trivial. During the prior two years, price was fairly well confined in between 3 points, and which 3 determined whether it was a bullish, bearish, or neutral year. The ne points tell us where the market will likely trade, but it doesn't tell us which of the 3 conditions to expect, we are on our own for that one.
Here are the new points for the Nasdaq. Nothing surprising here. We are off to a bullish start, but one week does not make a year.
One thing about the DOW: on the SPX, if we hit R2 this year, it will be an all time high. If we hit the same on the Dow, it won't even be close to an all time high (the Nasdaq is a hopeless case, we may not see an all time high there until hell freezes over). If that actually means something, I'm not aware of what it is, but is is sort of interesting.
The Transorts chart never seems to make any sense at all, until you look att he pivot points. Then it all becomes crystal clear.
Even a semi-bearish test of the S1 pivot would leave the Russell 2000 in pretty good shape, and trading up to the R1 pivot would be incredibly bullish. If it gets above R1 and rades in the territory between R1 and R2, we are in for a vry good year.
The pivot points tell us where we are most likely to trade, given conditions in thee market. What they don't tell us is what those conditions will be. For those, we will have to look for clues elsewhere.
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.