Market update

Today the market rallied but nothing is really changed.  On the SPX P&F chart, we can see that the support is still solid, the uptrend is confirmed by higher highs and higher lows.  On the hourly chart, the multi-week consolidation is ascending a little bit but there is no real breakout yet, so the real direction is still unknown.  Statistically the breakout at the up side is more likely, which is consistent with the daily chart.

SPX P&F chart SPX hourly chart

The market breadth in the past two days was very bullish.  Especially the volume was much higher, $CPC $CPCE and $CPCI reflect that sentiment reached a high level. We have yet to see if this indicates a short term top.

As all of us know, the trend of gold and US dollar has reversed.  This will impact the financials and commodities.  At the moment XLF doesn’t look well on daily chart, on the hourly chart it’s approaching the resistance at ~14.5.  The potential pullback could cause more upside in the short term, but it has to stand above 14.5 firmly to prove the rally.

XLF hourly

Summary: intermediate term I am not sure (technically bullish, but US dollar might be a problem);  short term should have more upside but pullback might follow.

Market Update

No more “buy dip”?  The market has consolidated for several weeks and hasn’t gone anywhere.  Recently it seems “sell into strength” is back and effectively dragged down all tempts of making new high.  Breaking the trading range at the upside looks very tough.  US dollar jumped up last Friday and consolidated today.  On the daily chart, although negative divergence we have seen for months are still there, technically speaking uptrend still holds before SPX making a swing low below 1030 (nov 2).  Personally I think it’s better to watch and see how the situation develops.  Because of technical and fundamental improvement of the broad market, at the moment I don’t bet on another down leg as deep as sub 800.

SPX hourly

Strengths of sectors are mixed.  Tehnologies and industrials are not lagging which is not a bearish sign, but financials are quite weak.  Defensive sectors seem getting stronger.  My speculation is a prolonged consolidation or some pullback.

Sector overview

The descending triangle pattern was resolved at the down side.  Unless making a swing high above 14.9, the downtrend should continue for a while.

XLF hourly

Take a look at some big names in financial sector, most of them look tired except for V and MA which were better than peers in the past.

Financial sector candle glance daily

Summary: consolidation will continue or turn itself into an intermediate-term pullback.  But it’s still risky to short the broad market.

Market Update

Technically bears have not struck back to the market yet, at least for now.   On the following P&F chart, what we can see is still higher high and higher low, which is not even a major pullback.  After the last Major Distribution Day, the market bounced back a little today, while the volume shows that there are still many people buying dips.  On the SPX daily chart, negative divergence on most technical indicators has been there for several weeks but so far all pullbacks are gifts to bulls.  Take a closer look on the hourly chart, the current pattern is either a flag of consolidation or Header & Shoulders, depending on which side the breakout will be.

SPX P&F Chart SPX hourly

The triangle pattern on XLF was broken at the lower edge (14.54), today it went back above this support/resistance and so negated the previous breakout.  Personally I think 14.54 will become a support in the near future.

XLF hourly FAZ hourly

No update to the US dollar index chart.  Currently there is no sign of the downtrend being ended.  From the following sector candle glance chart, we can also see that the broad market looks healthy, since there is no sign of money flowing into defensive sectors.

In summary the near term and intermediate term outlook are bullish, and personally I think last Friday low will be a significant swing low.

Market Update

EUR/USD daily.  It’s due for a pullback.

SPX hourly.  In consolidation and may breakout at the upside.

Sector overview.  Techs and Industrials are very bullish, so is the market outlook.

XLF hourly.  Looking forward to upside breakout.

FAZ hourly.

EWZ daily (negative divergence, may pullback) EWZ hourly

Crude oil.  looking for more pullback in short term and more upside.

Market Update (2009-11-16)

Today the market has decisively broken the resistance at 1100 and made a new high.  In the previous weeks the volume had been increasing with the rally, however today’s volume was substantially higher.  After the previous major accumulation day, today’s strong market breadth (NYUPV:NYDNV=7.37) has further affirmed the uptrend.  The last three day’s consolidation (a flag pattern) fixed a few overbought conditions on technical indicators.  At the moment the market may revisit the nearest support but large pullback may not be likely.  On the SPX intermediate-term daily chart, negative divergence on several indicators are still there but we have yet to see when it will become a real problem.  On SPY 30-min chart, all indicators show negative divergence which could lead to minor consolidation or pullback.

SPX daily

XLF is quite weak in these days.  On the hourly chart, the trend is up and a bullish flag pattern formed.  The volume increased a little bit but not very significant.  The nearest resistance is 15.38.

XLF hourly

QQQQ broke out from the consolidation today and revisited the nearest support at 44.16.  RSI and MACD have a little bit divergence so further pullback may be expected, but i guess it will be bounced back up again at around 43.75.

QQQQ hourly

As previously mentioned, US dollar more or less indicates where the broad market will go over the intermediate term.  On the daily chart, one can see that there is no sign of downtrend being reverted.

US Dollar index daily

Summary: uptrend has been confirmed.  A pullback (or consolidation in certain sectors) may happen but it would be a buyable dip rather than a short opportunity.