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Charts courtesy of stockcharts.com

Friday, May 3, 2013

Friday Weekly Charts

 Today we got an undoubted follow through day, which is a moot point in that IBD had already called a "reusmed up trend" earlier this week (Monday, I believe). The only question I have is, is this the resumption of the previous up trend (IBD seems to think so: you can glean something of what IBD is thinking by looking at the "investor's corner" columns. Recently they have dealt with market tops), or is this the start of a new up trend? Was the period between mid February and mid April the "correction" that I was expecting? We are in a very strangely behaving market, and I would not dismiss that possibility very quickly. While it doesn't necessarily change anything as a trader, it does change the long term strategy, and at this point, I am totally stumped as to what to make of all this. This market, as well as the other markets, have been so twisted by Fed and government interference that is seems the old "rules" no longer apply.

 Well, at least one thing makes sense: on the weekly chart, the SPX is testing it's R2 pivot point, normally a point I would expect resistance, and even would be willing to call a short term top, but no more. MACD and stochastics have been in the process of rolling over for several weeks now, but that has not stopped the market from going higher.

 The Nasdaq, one of the few indexes still following the old ":rules" broke out past the R1 pivot this week, putting it firmly in an up trend, one which now shows signs of gaining strength.

 The Dow industrials have again popped up past the R2 pivot. The last time it did that, it pulled back the following week, giving probably  the last entry point we will get for quite a while. I didn't bother here to try to figure out where resistance is, because, as Locutus of Borg would say, "Resistance is futile" (sorry to all the non-Trekkers for the obscure Star Trek reference).

 The Transports, the strangest behaving of all indexes, actually did enter a real correction, even if it was short and shallow. This is very, very extended, but may be the "target" of some manipulation by TPTB, so it can go higher.

The Russell 2000 was on the verge of a breakdown just days ago, but everything is just fine and dandy now. Look for this to hit R2, probably quite soon. After that, all bets are off.

We appear to be in a no longer free market. The bond market is now a monstrous bubble waiting to be popped, and that may be closely followed by a stock market and housing bubble. Bernanke is trying to create the "wealth effect"; by blowing asset bubbles, he gives people the belief they have more wealth than they actually do, to get them to spend money they can;t afford to spend. Why he thinks this is a good idea is beyond me, but I am not a Ph.D, so I'm sure he doesn't give a crap what I think. I sure hope, though, he gives a crap when the bill for all this comes due.

I will have the new highs update shortly.

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