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Friday, February 15, 2013

Friday Weekly Charts

Here we have our weekly look at the pivot points for the mnth, and this week we came within 5 points of R1, which is the first logical target for the month. Thta is close but not close enough to call this a top, but it is starting to look like one. We got a bout of distribution today (although this probably does not qualify by IBD's standards), and worse yet, RSI is at a lower level than it was the last time it peaked out last month, meaning the internals in the market are weaker. While nothing is conclusive on this chart, I am leaning mildly bearish here.

There isn';t much on the weekly chart to come to a bearish conclusin, expcept for one critical item: volume is drying up. Momentum wise we are topping out, but we are still far enough below R1 that we can move a bit higher here before hitting it. There is, as of yet, no sign of resistance, but we are at the point where at least a minor correction is just about due.

The Nasdaq, like the SPX, is below an all time high, but unlike the SPX, is not yet ata 5 year high, and has hit a wall at the 2012 high: three times in a row it has smacked against it and been thrown back. I suppose if it tries enough times, it will eventually get through, but too many failures can also cause the opposite.

The Dow industrials have also smacked face first into resistance, right at R1 (forget all the hype about 14000). The same goes here: too many failures could really send this reeling, but a breakout could send it flying.
How the transports went from the long term weak sisters of the market to  going parabolic in a matter of less than 2 months is beyond me, but I will be looking for this to smash into R2, which it could withon a week or two, and see what happens there. my guess is it stops cold, but tha is just a guess and absolutely not investment advice.

The Russell 2000,just barely nicked R1, which, despite a chart which isn't in the least bearish, may jus be a top for now, at least on an intra-week basis (we could actually get a higher close next week without going above this week's high). Most l;ikely, we are talking about a short to intermediate term top, but we will have to see.

All signs are still pointing to a correction coming, and I am quite certain it can begin at any time within the next two weeks. While my indicators do net say anything about how long or severe it will be, I am looking forward to another chance to load up, so I sure hope it comes sooner rather than later.

I will have the new highs update shortly.

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