CurtisM

$SPX Daily, 03/21/2014

SP:SPX   The S&P 500 Index
271 4 3
$SPX             up 25pts on the week and 7pts on the month. All the moving averages are in the right order and, with the exception of Wilder's ADX , all oscillators are rising.

$SPX             has met resistance right around 1884. The first time it went up there on 3/7, it did so with 2.2 billion shares and then closed 6pts off that intra-day high. This past Friday, $SPX             pushed up to 1883.97 and then closed almost 17pts off that high. Until proven otherwise, I'm going to attribute this large price swing to Op/Ex and if this assumption is correct then $SPX             should make another run for 1884 early this coming week and then close above that level. So this is going to be the key level to watch as there is no resistance above that level. Some are looking at the current situation as a double top and I just wonder why now? Perhaps this will prove to be the case but to be confirmed $SPX             would have to roll over and close decisively below 1839. While I don't think that is going to happen, my expectations for a move lower last week to the 1810 area proved wrong and so my expectations for higher highs from here could also be proven wrong.

The monkey wrench in the works for higher highs continues to be a falling Summation Index. A look back at history shows that when the Summation Index rises above 1000 and begins to roll over, you are likely to get some kind of correction but not always as sometimes the market just ignores these signs of underlying weakness and eventually the Summation Index bottoms and reverses. However, until the Summation Index does bottom and reverse there is the potential for some kind of correction. Some of these corrections signaled by the Summation Index have been relatively minor while others have lasted weeks and months so the Summation Index needs to be monitored from now until if reverses.

The QQQ's have been the driving force behind this rally and they got hammered on Friday for reasons I mentioned in my post about IBB             . The RSI on the 60min chart of IBB             dropped to 28 on Friday and so is extremely oversold in that time frame and as a result IBB             should bounce on Monday, or famous last words. The RSI in the 60min chart of QQQ             only dropped to 35 on Friday and so is not as oversold as IBB             but if IBB             bounces and if SYMC             doesn't drop another 13%, then the Q's should also bounce and if the Q's do bounce then the rest of the market will follow along. So keep an eye on these three early Monday morning for clues as to which way the market is likely to head on Monday as well as the rest of the week.

Be careful and GL

I covered my SPXS and TZA shorts today near 1850. March M/E upper channel is near 1925 and lower channel is near 1780. That left about 75 on the upside and 70 on the downside so there is no reason to hold shorts at this level. Much of the bubble froth in Solar, e-commerce, Bio-Tech, 3D Printing, and Social Media. A nice rotation into value sectors like Energy, Banking, Large, Tech, Housing and Airlines had a move the last several months. Overall a very healthy rotation.
Mid-year risk is to the upside as upper channel move toward 2000. I would add my shorts with a fail near 1900 near term.
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CurtisM SimGlenn
Glenn, nice move on your part getting out of shorts yesterday. $SPX can't take too much longer before it makes a run for 1884 or it's going to fall of its own weight.
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This is certainly a hard call right now as the market just tracks sideways. The 2 failed attempts at 1884 combined with the SPX trading at multi-year upper channel tells me the upside potential is about 30 point while the downside is about 100 points. I can onluy sopeak in terms of probabilities at this point IMHO.
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CurtisM SimGlenn
IMHO, this is all about the Q's and NQ's. At the moment, the NQ's are trading about 70pts off Friday's intra-day high and this creates a problem for tech lovers. Will dip buyers see this as an opportunity or will that kind of move spook them? The futures started trading 30 mins ago and I really thought the NQ's would be up more than their current 1.50pts by now. If the NQ's don't start to gradually rise in the overnight session and if they're not considerably higher by the time the cash session opens tomorrow morning, then arguments for a $SPX double top become more credible and we could be looking at your 100pt downside target rather than new highs in the week ahead.

At 6:35 pm ET, NQ's up 2.25.

GL
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