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Friday, June 29, 2012

Daily update 6/29

Explosion!.  Now what happens.  Here is the daily SPX chart.

We are back to the resistance line and the 100 MA again.  The first time we got up here the odds were very high it would pullback.  This being a second attempt it is not so clear.  Very big volume today and over 300 new highs.  Check out the 195 minute SPY chart.

We broke out of the triangle with a vengeance.  I have placed an up trend line under the higher low formation.   Keep in mind that we are very far away from it, so a pullback to it would be sizable.  It is also very shallow so the uptrend is not very vigorous either.   Some times a pattern like this will turn out to be a bearish rising wedge formation.  If we continue up next week that will not be the case this time.  Check out the weekly SPX chart.

We still have neutral price bars at the 18 SMA.  We did not get above last week's high yet.  Four weeks off the low and we can see quite a difference between now and last Oct.  This many weeks into that rally we had three green bars and had clearly conquered the 18 SMA.  The economic data was starting to improve by then also.  A situation we clearly do not have today.  I am sure this will bring the bulls out in force, but all I can say for sure is they won a battle.  It is not clear they have won the war yet.  Today's news had nothing to do with market fundamentals.  It was essentially an European TARP program.  I am sure people will say that worked out great.  However, that program was announced in Sept. of 2008 and the market did not bottom until March of 2009 at a much lower value.  The problem is going to be the news flow in the short term is not good.  People may choose to over look it or not.  I don't know.  We will have to see if there is any follow through next week.


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