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Friday, January 11, 2013

Friday Weekly Charts

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 will have the new highs update shortly.

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