Technical analysis for shorts & longs Message Board

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Strategies & Market Trends : Technical analysis for shorts & longs

SPY 681.43

+1.6%

Nov 10 4:00 PM EST

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To: Johnny Canuck who wrote (52532)	7/15/2016 8:34:05 PM
From: Johnny Canuck	2 Recommendations Recommended By E_K_S Return to Sender Read Replies (1) of 67816

Though the SP500 saw some profit taking after 3 up days in a row. the index still managed to finish up 2 of the last 3 days. Today's outside day where the range exceeds the high and low of the previous day and the index finishes near the low of the day indicates a lack of short term momentum. It may just be trader being cautious heading into the weekend after a decent advance last week. The SP500 remains at historical P/E highs so till the E (earnings) part of the equation increases to lower the P/E traders will be cautious. Remember earnings season is unforgiving and given the extended nature of the market, there is still fear of buying a short term high that will keep traders sitting near the exits. Same comment on DOW as SP500. The fact they are moving together indicates macro trends are having a strong influence. Buy signal remains in place in all timeframes for the DOW transports which is supportive of the move in the DOW. A new high in the DOW transports is required to confirm the next high in the DOW though, so till that happens there is not a strong buy signal on the DOW despite the new high. In the short term the index is seeing some profit taking after 5 up days in a row which is normal. DOW utilities intermediate trend remains upward despite the short term profit taking. COMPQ has broken the trend of lower highs but it needs to set and confirm a new high before traders put it back on the bullish list. Russell 2000 stalling on high volume today. Though it has not broken back below the previous high the lack of movement in the small cap stocks on high volume indicates the bulls and bears are deeply divided on the next move for this index. Short term traders will take profits on a down open on Monday, intermediate traders will wait for the break of the previous high. Either way there are early indication some traders are shifting to a less risk adverse position. Weak counter rally in agriculture. Though the index is weak, it has not violated the lower upward sloping trend line. It is always a volatile index but it difficult to envision going long here. Going short would have been during the 50% bounce in late June. CORN not able to get above and sustain the previous low so for now expect lower lows. Financial seeing some expected profit taking. Again traders want to see a new high before getting more interested in this sector. A new high is also need to support the recent high in the DOW. The DOW does not go far without a healthy financial sector. Energy still waiting. Interestingly it has been the most stable sector during this last period. Gold still in an intermediate bullish trend up seeing some profit taking as trader move back into stocks. Natural gas hovering about the $2.75 support level. For now the intermediate trend is sideways.

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