Like I said in my earlier post there are plenty of clues left on the charts that are indicating higher prices. The NAZ and S&P closing at their highs for the month of Jan. were just two. The fact that all the major indexes closed higher for the month of Jan. was another. And although the price action of the other indexes have been very choppy lately, it is to be expected when prices are attempting to break out of consolidation pattern. IMO, its the analysis of price and time, with more emphasis paid on weekly and monthly closes that can greatly improve one's analysis of trend. But which trend are we talking about? The DOW losing 120 pts because it bounced off resistance within a tight range. Or, the impact of the 173 pt intraday move in the trannies last week to their overall trend. Should we interpret that day with any significants? The trend comes in many forms. Daily charts build into weekly which turn monthly which becomes the basis for the long term. Its correctly analyzing those long term trends that will add the most 0000's to your brokerage account. The fact that the NAZ and S&P closed at or very near their highs two months in a row should be a good indication that this bull will not die that easily. That move in the trannies was significant in that it broke through overhead resistance established during the past couple of months. But yet the move was stopped dead in its tracks because it ran right into more resistance at higher prices. A look at the daily chart says that we could get a push to higher levels the next couple of days. The DOW is also setting itself up for a breakout. A close on Friday anywhere north of the close today would be very bullish. What about the charts of the big players that make up those avgs. AT&T had a huge day with the highest closing on a daily basis. CMB closed at new highs today hitting $80 for the first time. Banks obviously happy with AG. Stocks to watch closely would be IBM, MO, MRK, JNJ and most of the airlines stocks. Most of these stocks are hanging on to support or attempting to break key resistance levels. Can anyone say internet rally? Some of the stocks made nice moves today. However they have not broken out yet and many are at make or break positions on their charts. AMZN, YHOO, ONSL, BAMM, CYCH, CYSP, AMEN, CNKT and the rest should either break up or down this month. Perhaps NAVR which closed at a daily high of $20 is giving us clues to which direction these stocks will be going.
This is without a doubt a critical point in some of the avgs. The trading of the next two days will set the stage for a possible breakout for the lagging indexes. Watch to see if the market can add onto the gains of today.
All the great analysis of the past couple of weeks should be put to the test here. IMO, being bullish or bearish has the greatest consequences during the next couple of weeks.
Good luck trading.
SO |
