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Charts courtesy of stockcharts.com

Monday, August 12, 2013

Vacation Time In The Markets

The chart with the pivot points wasn't making much sense, so today I tried chart support and resistance, and lo and behold, now it makes sense. We have a support level somewhere just above 1580, and that is the mid point between two areas of support and resistance. The selling pressure seems to drop off as we appraoch that level, and while not much buying comes in, there is just enough to get us a little above it. We may be stuck in a pattern like this for the next couple of weeks, alhough we aren't far from a breakout to the up side, or the 50dma to the down side. Unfortunately, breaking wither won't mean much until we get the volume back in September

The Nasdaq is offering the breakout to the up side case, as it is not far at all from a brekaout, has a pretty decent volume patttern (but declining CMF), and a rising price relative line. Unless this breaks the trend it is in now, I don't see how the market can get into any real trouble yet.

The Dow chart looks really lousy, but a lousy Dow chart is much preferred for the bullish case than a lousy Nasdaq chart. If the price relative line keeps dropping, we should start to see the market rally, at least, that is the theory.

The Russell 2000 had an extremely good day today, and is having a breakout in it's price relative line. Price should not be far behind, and we may be seeing this break out in the next couple of days.

The market is range bound, which is not unusual for this time of year, since most of the big money boys are on vacation. I expected some games from the computers, but so far, there really hasn't been much of anything. We may be stuck here for a while as we wai for vacations to end and the real market to begin after Labor Day.

I will have the new highs update shortly.


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