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Trend table status

Trend

SP-500

R2000

COMPX

Primary

Up 7/31/20

?- 3/31/20

Up 5/29/20

Intermediate

Up 10/2/20

Up 8/21/20

Up 10/9/20

Sub-Intermediate

Up 10/15/20

? 10/21/20

Up 10/13/20

Short term

? 10/19/20

? 10/19/20

? 10/19/20


Don Worden of Worden Brothers (makers of Telechart software) used to keep a trend table before his health issues got in the way. I always found it useful. Mine is slightly different. Hopefully helpful. Up? or Dn? means loss of momentum. ? by itself means trend is neutral. ?+ or ?- means trend is neutral with bias of up(+) or down (-)

Friday, December 20, 2013

Daily update 12/20

Rally chasers showed up on the better then expected GDP I guess.  Here is the daily SPX chart.


SPX broke clearly above the recent congestion area on strong breadth.  The higher close confirms the trend flip back to up from two days ago.  The volume was high, but it was expiration day so that is normal.  I have added another support line at 1808 the area of several  closes in the trading range.  A close below 1808 would be the first sign the break out is failing.  Going into the end of the year I am not sure there will be many big players around to sell.  I would think for tax purposes it would be better to sell in Jan. for most people.  In the absence of bad news a drift up seems likely.  There is the possibility this turns into a fast and furious final blow off top type move.  The market is extended in price in the long term, but not in the short term.  Market internals are not in a short term overbought state either.  As long as we stay above 1808 the bias is up and buying dips should be a good strategy.

If this market continues up it will be interesting to see if it broadens out in a big way or continues to be fairly narrow.  During a blow off type move stocks at all time highs tend to attract traders and can make rather large moves.  If the rally broadens out then beaten up stocks tend to attract longer term players and can play catch up while the leaders slow down.  It needs to broaden out if it is to be sustainable. 

Here is an interesting link about identifying bubbles. 
http://www.ted.com/talks/didier_sornette_how_we_can_predict_the_next_financial_crisis.html

Near the end of this article there a comparison between the current market and an idealized bubble chart.
http://www.hussmanfunds.com/wmc/wmc131209.htm

Chart practice has been updated with LEN the stock tonight.
http://traderbob58-chart-practice.blogspot.com/

Have a great weekend,
Bob

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The information in this blog is provided for educational purposes only and is not to be construed as investment advice.