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Friday, August 17, 2012

Daily update 8/17

Hmm, I think I need to check my calendar.  Today was option expiration, right?  Here is the daily SPX chart.

Today's volume was actually lower then yesterday.  I am pretty sure I have never seen that happen before.  Often it is the highest volume day of the month.  I don't know if there is any particular meaning to that or not.  I guess we will see what happens next week.  We ended the day 4 points away from the intraday high of the year.  I would think the bulls would test that next week.

Here is the 195 minute SPY chart.

We have blue bars on this chart showing price is extended above the upper Bollinger band.   The last two times resulted in pullbacks.  I don't know if it will be three for three or not.

We can see that price shot pretty much straight up into this retest of the spring high on extremely low volume.  This would be a textbook double top if it rolls over.  I don't believe people are going to just pile in here with the extended price.  In order to truly break out and go higher I think the market needs to form another fairly tight consolidation.  If it starts to pullback too much, I think it will end up continuing on down.
I am not sure how to define too much at this point though.

Here is the latest NAAIM survey.

The active investment managers are about as long as they have been all year.  This is essentially all in.  Given the fundamental backdrop of the economy and earnings I just don't see them getting more long then they were in the spring when things were much rosier looking.  With the VIX having a 13 handle this is a high risk point to put a large amount of money in the market.   

Now it is wait and see what happens time.

The SPY 60 minute 50 SMA should be a good bull/bear line.  I have talked about this MA a lot in the blog because I find it extremely useful.  Here is the current chart.

After crossing above the MA on the 8/3 gap up it never closed below it.  It did test it one time, which turned out to be a good buy point.  This is normal behavior when the market makes an accelerated move. 

Chart practice as been updated if interested.  http://traderbob58-chart-practice.blogspot.com/


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