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Friday, October 11, 2013

Friday Weekly Charts

 I can't say the bulls got what they wanted today, but I think I can say they did no get what they needed: either a pause or a follow through on higher volume would have set the market on a bullish path: what we go today was a small follow through rally on lower volume. Having said that, in the IBD scheme of things, today was mostly irrelevant: day 4 of a rally attempt is the first day that an "official" follow through day can take place, and that will be on Monday. Today's volume should be easy to beat, and anoher move like yesterday's will put cement shoes on the bears. So far, though, this is starting to look more and more like a short squeeze, and hat won't last long.

On the weekly chart things don;t look terribly dramatic: we are still in the uppper half of the most recent trading range and moving up.  MACD has been dropping since May, and the market really hasn;t gained much since then, but that is telling us what has happened, not what will.

 Looking at the Nasdaq, you would barely notice a correction, and it accorsing to the trading range projection, still has higher to go, albeit not a lot higher. MACD here is going up, with virtually no sign of slowing down: stochastics are overbought but they have been all year, so I wouldn't sweat that. If the market is near a top, it is not showing up here.

Well, if it's not on the Nasdaq, it surely is on the Dow industrials. Had it not been for the spike on the right shoulder, this would be a perfect head and shoulders pattern, and it may end up acting like one, although I'm not going to bet on that. This may be a bearish chart (and that is debatable), but it is the only one.

The transports are still in a strong up trend, and held up very well recently. Unless this changes I don; see a lot of down side risk in the market yet.

The Russel 2000 had a two day correction, which does not show up on this chart because it bounced back and is at a new high. This may be the most important chart of all of these, and it is about as bullish as you can get.

Itt could be that the market has survived the budget/debt ceiling debacle, as I find it highly unlikely we will go another week without a resolution. When all of the crises of 2013 have finally passed, then the market may finally hit a top, but right now, it sure does not look like the top is here.

I will have the new highs update shortly.

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