The market is approaching a major inflection point as it rolls toward a test of the April high. Technical indicators are strengthening, and the 6 month cycle projection points to 1470. That would be more than enough to turn long term indicators bullish, but I will remain vigilant for signs of a rollover in the…
Stocks did an about face on Friday as the market responded to the “better than expected” jobs data which came as no surprise to us. Cycle projections moved higher as a result of the rally.
I will be taking a short vacation until Sunday. The usual Professional Edition reports will not be posted Wednesday night through Saturday. Regular publication will resume Sunday-Monday. See you then!
The market’s pullback continues the recent indecisive, inconclusive pattern, but the 6 month cycle generated its first upside projection on Tuesday.
The averages took a breather, but most technical indicators continued to strengthen on Monday, particularly the cycle screening measures. Many observers expect a selloff if the Fed doesn’t do more QE on Wednesday, but I’m not so sure that any selling shouldn’t be faded.
The market broke through key resistance to apparently break out of a trading range, but it faces one more resistance area around 1385-90 before it would be in the clear to test the highs around 1420.
Cycles have gone dormant. The market is thin and particularly susceptible to reacting violently to any minor news, which is what it did today.
Buffeted by an onslaught of bad news the market still hasn’t buckled. The 1335-40 area is a key support level, but even if it breaks, there’s another support line indicated around 1326. If that breaks, then the new 13 week cycle projection of 1287 would be a likely target.
The market faces conflicting psychological forces— fear over Europe and disappointment over AAPL’s earnings versus the expectation of more QE based on a story in the Journal late today by Jerry Mahoney/Charlie McCarthy from Bernanke’s knee. The 13 week cycle is now in a down phase and the 6 month cycle may be joining it.
The bottom dropped out on the open on Monday, but the averages opened right at support and reversed from there, stairstepping higher all day. Critical support in the 1340 area held, but other signs suggest that the bears have their best chance to take control over the next 4 weeks.