The NAS finished the week strong closing at another ATH on Friday. It has been a breathless rally from pull back low on Oct 4th. I had expected some consolidation at the previous ATH, but the market only took a brief two day pause and then exploded higher led by the mega caps most notably TSLA and MSFT. Even disappointing results from AMZN and AAPL barely dampened the enthusiasm.
The NAS has opened on Sunday night right at the 1.13 fib extension. This marks the completion zone of the bearish harmonic I posted last week. Typically when price reaches a bearish 1.13 completion zone the reaction is a quick and sharp move to the down side. The longer price holds the high the greater the probability that the prevailing trend will continue. A break of the 1.27 fib extension negates the bearish pattern. As I mentioned last week I was using the harmonic completion zone as a target not a place to short. So at this point my target has been reached and I will begin the week sitting on my hands.
The market mover this week will be the FOMC meeting on Wednesday. It is expected that they will keep rates the same, but announce the beginning of tapering. No one has a clue how the market will react and its best not to place any large market bets (bullish or bearish) prior to this event. On one hand the NAS has made and incredible run and feels overbought. On the other hand we are now beginning the most bullish period of the year for stocks. My preferred setup at this point would be for the market to take breather going into the FOMC and then react positively and rally into year end. That's my hope... let see how it plays out.
Notes
Mon... Manufacturing PMI
Wed.. FOMC meeting, Crude inventories, Factory orders, Non Manufacturing PMI
Fri... Non Farm Payrolls.
Some of the earning I'll be watching...
AMC, UBER, BABA, MRO, PINS, PTON,PFE
The NAS has opened on Sunday night right at the 1.13 fib extension. This marks the completion zone of the bearish harmonic I posted last week. Typically when price reaches a bearish 1.13 completion zone the reaction is a quick and sharp move to the down side. The longer price holds the high the greater the probability that the prevailing trend will continue. A break of the 1.27 fib extension negates the bearish pattern. As I mentioned last week I was using the harmonic completion zone as a target not a place to short. So at this point my target has been reached and I will begin the week sitting on my hands.
The market mover this week will be the FOMC meeting on Wednesday. It is expected that they will keep rates the same, but announce the beginning of tapering. No one has a clue how the market will react and its best not to place any large market bets (bullish or bearish) prior to this event. On one hand the NAS has made and incredible run and feels overbought. On the other hand we are now beginning the most bullish period of the year for stocks. My preferred setup at this point would be for the market to take breather going into the FOMC and then react positively and rally into year end. That's my hope... let see how it plays out.
Notes
Mon... Manufacturing PMI
Wed.. FOMC meeting, Crude inventories, Factory orders, Non Manufacturing PMI
Fri... Non Farm Payrolls.
Some of the earning I'll be watching...
AMC, UBER, BABA, MRO, PINS, PTON,PFE
Comment:
Early morning reaction to the 1.13 fib dropping it about 1%. Similar move happened to the ES then went on to new highs. Still insanely bullish price action across the board. No real fear so far about the FOMC on Wed.
Comment:
Minor pull back at the 1.13. Tapped it several time then broke above. Clearly the NAS want 16000. Market is all in this point.
Comment:
Easily blew through all levels. Very extended now though. Watching this trendline.
