Technical analysis for shorts & longs Message Board

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Strategies & Market Trends : Technical analysis for shorts & longs

SPY 695.40

+0.5%

Feb 2 4:00 PM EST

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To: Johnny Canuck who wrote (49128)	1/28/2013 8:11:32 PM
From: Johnny Canuck	1 Recommendation Read Replies (1) of 70375

SP500 consolidating a bit today. The day range and the lower volume are not indicating any serious correction yet. A pull back to the 20 days SMA would do a lot of relieve the overbought condition of the index. Similar comment on the DOW. Similar condition on the DOW transports too. Not sure what the COMPQ is waiting for but it is essentially going sideways. Russell 2000 one of the few indices able to advance today. This is a good sign as sector rotation needs to happen in order for the market to move higher. Financials pulling back on lower than average volume. This is nothing to work about yet. Energy sector pulling back, but it maaged to stay able the break out point of last week. As long as it is able to hold the new high the index will attract new traders looking to participate in the advance. Gold still on a sell signal, but holding above a strong support level. Natural gas breaking support and above average volume. It looks like it will at least test the $3.20 area. This is a plus for producers using natural gas, but a big negative for E&P companies. Market conditions favour the large conglomerates like XOM, CVX, RDS-A as they have the deep pockets to keep drill despite lousy end market prices. They also have access to financing that a lot of the smaller E&P companies can access. Keep away from E&P companies that can not fund their drill programs from cashflows. In general I don't see a severe market sell off just yet. One should tighten stops to protect profits though. Profit taking on individual stock and sectors have to happen soon. It usual is just after tax season in North America because all the tax deductable retirement saving contributions need to be placed somewhere. Once those funds are placed, liquidity will dry up.

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