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Wednesday, November 13, 2013

Daily update 11/13

Break out to new highs.  Here is the daily SPX chart.

SPX closed above recent resistance.  It still has a white bar which is really odd on a thrust to new highs.  I looked back for a decade and could not find a pattern like that.  In the market status system  there were only 3 green daily charts of the 10 items.  I don't know if this makes the odds of a break out failure any higher or not.  All I can say is that it could. 

There were 161 new highs today.  Still below the desired 200 level.  I have no idea what moved people to buy like crazy.  Was it important and will it last?  Follow through is going to be key here.  Some indexes made it to slight new highs and some did not.  One notable one that didn't is XLF.  It was the darling of the day on 11/8 when everything reversed the key reversal day.  It ended today just below the 11/8 close.  It is also below the May intraday high.  IWM also did not make a new high today.  Both breadth indicators remain negative as well.  Just about any market internal you can think of has a negative divergence.  These are the conditions that break outs often fail so don't fall asleep here just yet.  This could be a last gasp type move just as easily as a break out to go higher. 

Every time frame from the 195 minute on down has a blue bar indicating it closed above the upper Bollinger band and is extended.  So we are extremely over bought in the very short term.  That may mean tomorrow is a narrow range digestion day.  Any close back below 1775 could be an indication the break out is going to fail. 

Chart practice has been updated with TER the stock tonight.


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