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Friday, October 25, 2013

Friday Weekly Charts

 It may be the the consolidation has ended already, although with the volume we got today, we certainly can;t call this a breakout. We may still be range bound, as the big money knows they would be insane to be accumulating up here; they are no doubt waiting for a better opportunity, However, we are right in the meat of earnings season, which, despite being a dud, has not done any damage to the current up trend. Longer term, we are just about at the position in relation to the 50dma where past pullbacks have occurred, and it is looking like the market wants another pullback here.We still have a good shot at hitting R2 by the end of this month, but that would be the last gasp of this rally.

On the weekly chart, we are not as extended as on the daily chart,  but are getting on the overbought side. I have a target here of just over 1800 by the end of the year, and there is a possibility we will go that high, but I am now having doubts. We have not had a minor correction since 2012, or a major one since 2011, and are overdue.
Even on the weekly chart, the Nasdaq is starting to look overheated, and may be in the early stages of a parabolic, blow off move. If that happens, any attempts to figure out resistance will likely be futile, and the rise could last a lot longer than anyone thinks is rationally possible. We aren't there yet, but we could be soon.

The Dow industrials have a very nice looking base here, and look like they want to go higher. If the bears have any hope, I don't see it here.

Nor here on the Transports. These appear to be making a repeat of the early 2013 move. The volume here is highly favorable to the bulls, and these are likely to be moving higher.

Leave it to the Russell 2000 to remain rational. This is in a beautiful 45 degree up trend that, at least here, does not show signs of overheating. This, also, could go on for a while, and if it does, I expect the rest of the market to, if not move up, at least not collapse.

We had another good week in the market, but I don;t think it is going to go on much longer. Much of the market is getting frothy, and I am seeing some changes in the leadership in the market. We are due for a correction, but at this point there is no way to predict when, how long, or how far it goes. For now, for the very short term (rest of this month, what's left of it), I remain bullish.

I will have the new highs update shortly.

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