Technical Analysis

So Goes GE So Goes the Market

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If this omen regarding General Electric Company still holds true then the picture is not looking very good for the sp500.  GE has shown in recent weeks a false upside breakout followed by a very high volume break down and 2B sell signal that was on higher volume than the May 6, 2010 flash crash.  … Read more

No Major Sign of Weakness in the Sp500 Yet

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Despite me issuing a BOT Short Signal today I have to confess that by the close today there was no major sign of weakness in the sp500.  On the contrary the market rallied to an almost unchanged close right in the last few minutes.  If the sp500 closes above yesterday’s high of 1184.38 tomorrow then … Read more

Switching to BOT Short Signal Some possible Cracks in the Foundation

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I am switching to a BOT Short Signal right now at 12:06 PM Eastern time at 1173.20 on the sp500.  I am seeing some possible cracks in the foundation of the current uptrend and I think it is prudent to be cautious at this juncture. The NDX is hover right at its 2010 April highs … Read more

Sp500 Rejects Near 1150 Range Again

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Today the sp500 hit an intra day low of 1155.71.  This was once again a move into the supporting range of 1150.  The sp500 once again today rejected this range and closed higher, signaling more upside to come.  It appears as though the sp500 will be able to jump over 1170 which should imply an eventual test of the April 2010 highs.  Today was the 6th consecutive close above the 2007 3 year bear market channel resistance line.

I am currently speculating that the sp500 will move into the RSI power zone above the 70 range at some point in October.  It is also possible that we could remain in the powerzone for a period of time somewhat similar to the behavior of the sp500 during the mid March to mid April 2010 time frame.  During that time frame (yellow highlight) the sp500 ‘trickled higher’ in a slow cumbersome fashion creating a series of higher highs and higher lows for one full trading month.

BestOnlineTrades currently believes this could happen again and it may once again last a full trading month or longer.  It depicts a potential scenario where one sees new shorts entering the market (top picking) and then having to repeatedly cover shorts after the market trends slowly sideways and then starts trickling up again.  Obviously this is not a profitable endeavor.  Shorting a market too early can indeed be quite costly.  And currently my longer term charts are suggesting that an extended bearish trend in the market may be quite a while away into the future.

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sp500 Getting Ready to Blast Through 1200

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Today was a consolidation day in the sp500.  There was minimal price give back given yesterday’s huge surge.  I interpret this as just another sign of the current internal strength of this market. The sp500 is poised for a revisit of 1200  and then eventually the old April 2010 highs of 2018.  The exact timing … Read more

sp500 Trades Reluctantly Down Today

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The sp500 today traded reluctantly down after hitting its ‘head’ on the top long term bear market resistance trend line.   Today’s price action was at first in the form of a small narrow range doji.  It was also initially completely within the range of last Friday’s price candlestick.  So the setup at the beginning of the day was a ‘double inside day’ which can sometimes lead to big moves.

We got a down move and closed modestly down in terms of price and volume.  Volume on the SPY was unusually weak and is a bit of a concerning sign as far as the bear case is concerned.

I really want to see a confirmed sign of weakness in price and volume that leaves zero doubt that the uptrend since early September is broken.  It is actually already broken if a trend line is drawn from the 1st of September up to recent highs, but it is not really broken with conviction yet.

The closing ARMS reading today at least on a 1 day basis was nothing unusual or extreme and maybe shows that there is almost zero fear in the market right now.

The Volatility Index continues to be squeezed slightly above a large falling wedge pattern.  It would seem that the VIX is about to launch higher in a big way, but it is still trying to get some running legs.  Sometimes northward moves out of falling wedges can very fast and abrupt right back to the top of the wedge.  This would seem to suggest that a sharp and abrupt move DOWN is within sight on the sp500.

The McClellan summation index on the NYSE ticked down today and may be starting to finally roll over.  It looks a bit like the summation index has double topped.

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