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Charts courtesy of stockcharts.com

Tuesday, July 9, 2013

Time For A Pause?


The trouble with using new software is that if something goes wrong, you have no idea what is causing the problem and how to fix it. For some reason the annotated charts are not working right now; I think a reboot would have fixed it but I had spreadsheets going so I couldn't try it, so it's unannotated  charts today. There isn't much to annotate here: we can see that the SPX advance has stopped right where it should, at the R1 pivot point. Volume dropped off a bit today, and it is likely we are going to see a pullback tomorrow, as the computers are probably watching that R1 pivot closer than I am. I am expecting at most a very slight pullback, but conceivably we could go as low as the 50dma (the simple average, which is higher than the exponential average shown here). Overall we are still in bullish condition, but a pause appears to be in order here.
Crude oil has been leading the market for a few weeks now, and has made a pretty spectacular move which has taken it past the R2 pivot. If it continues to rise, we can expect the market to rally with it, at least for a time, but I don't expect it ro continue rising without a pullback first.

Gold continues to search for a bottom, and may have found it. It has had a few false bottoms before this one, so you can understand the skepticism. It is when everyone is skeptical that it actually will bottom, and I'm not sure we are there yet. This is closer to resistance than support, so it may have a little further to drop.

The pause in the rise in Treasury yields had appeared to be ending on Friday with another breakout, but this one is also pausing. Someone is firing a warning shot here, and I'm not sure the people it is directed at are listening, so we may be seeing his move up again soon.

After a pretty spectacular drop, the Dollar index has staged a pretty spectacular ise. This is not correlating with the market very much anymore, which seems more fixated on interest rates than currencies at the moment. UUP made a pretty good move up today, so I would assume this did as well, and it looks like the now broken R1 is going to be support now.

The market appears ready for a pause, or even a moderate pullback, but overall, it is still leaning bullish, so I am looking for a positive July. Beyond that, I won;t hazard a guess.

I will have the new highs update shortly.

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