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Friday, May 24, 2013

Friday Weekly Charts

Sometimes I wish there was something besides pivot points to talk about on Fridays, but it os pretty obvious that the story of the day is just that. For the 3rd time this year, the monthly R2 pivot point did not stop the advance of the market (in fact, this month it didn'e even slow it down), but now it appears to be support. That means, with 4 days left in the month, we are probably unlikely to go below R2, and even if we do, there is another pivot point right below it. Chances are we will start bouncing up from here.

Change the monthly pivots to the yearly pivots, and we have nearly the identical situation on the weekly chart. While it is unwise to assume hat R2 will be support all year, for the time being it sure looks like it will be. One thing of note is that the high was nearly exactly equal distance above R2 as R1 is below R2. The may be coincidence, but then again, it may not be.

The Nasdaq cam up to hit the R2 pivot dead on, and then started to drop. I do not believe that is coincidence. First line of support is the 10 week average, but R1 is right below that, but I;m not too sure we need to worry about support just yet.

The Dow industrials paused at R2, then marched right up to the point equally above R2 as R1 is below R2, but passed it slightly, and is actually just a hair above it now. At some point we may get a pretty good idea just where resistance will be on those rare occasions that the annual R2 is broken: we may be finding that point about now.

The Dow transports have had me baffled all year, and this week is not exception. It looks like it has found next resistance, just about where I would suspect it to be. What happens now I won't even try to guess.

Even the Russell 2000 has broken R2, which now makes it support. I suspect, at least for now, that that support will hold and we will begin another move up, which may begin as early as next week.

The market is behaving sort of the way I would expect it to, but this year has been very strange, and boundaries that the market normally respects are being ignored. The market is overdue for a sizable correction, but I don;t think we are going to get it quite yet.

I will have the new highs update shortly.

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