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Wednesday, November 28, 2012

Daily update 11/28

There is a little intraday volatility for you.  Here is the daily SPX chart.

Today's candle is a bullish engulfing bar.  The volume was just about the same as yesterday.  SPX closed fractionally higher then Friday's high.  Are we ready to blast off?  Here is the SPY 130 minute chart.

There was a lot of volume on the first bar today which should be bullish.  SPY filled in one of the open gaps. The price bars are white now, not green.  This chart is a bit weaker then when we were at this same price area on Friday.  Will it roll over or break out to the upside?  I think this chart is telling me that it is 50/50 on direction.  What is the next news sound bite coming out of Washington?  Lets zoom in to the 60 minute chart.

SPY bounced right off the 50 SMA this morning on pretty decent volume.  This looks pretty good, but I can't say it is definitive on an upside break out.

We have had some pretty wild intraday moves the last two days.  That kind of price action usually occurs in a down trend or at major turning points.  If we were still near the lows, today would be considered bullish.  However, we just had a multi day rally.  If this sudden volatility is indicative of a turning point, does that mean we are making an important lower high?  The daily SPX chart looks obviously bullish doesn't it?  One problem with the market is that obvious looking moves don't always happen, LOL. 

The only thing I know for sure is that we did not close enough above Friday's high to say we have conquered resistance here.  Will the bears sell a gap up or cover shorts?  Will the bulls buy a gap down, or exit longs?  This looks like a tossup to me on what happens next.  A successful break out to the upside should target the 50 SMA around 1423.  If the market rolls over from here I think it will end up testing the Nov. low again.  We have had enough days testing this area that a rejection should be pretty powerful.  As I write this tonight the futures are down a little bit from the 4:00 close, but where will they be in the morning?  Sometimes the market is just plain ambiguous.  I think this is one of those times.

Chart practice has been updated with CA the stock for today.


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