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1.18.13 Friday | Weekly Charts
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$DJIA
Dow Jones showing great strength here. Last three weeks of bullish run has been supported by increasing volume which solidifies the move however currently trading just below our resistance level so maybe some hesitation is in stored coming week. Again this a weekly chart so on a daily basis, we might see some slowing down action this week or possible corrective move. As of now we do not have any reversal formations on this weekly chart other than we are running into a resistance.
Stoch also showing great sign of healthy trend here, though it is starting to reach overbought territory but that does not mean it can’t continue to stay in that overbought territory while the stock continue to soar. RSI similar story there and RSI is little bit more sensitive to it’s movement so usually it’s the first one to point up or down depending on it’s price action so if we get bearish candle end of next week, expect RSI to point down.
MACD lines has been just crossed and this is very bullish signal especially looking at this weekly chart. I’ve been talking about this bearish MACD divergence on it and we still have that and it never played out. I am not sure if it’s going to play out but so far it is looking very bullish according to MACD and it says there are more to go. MFI is also heading to top of it’s band here and again it can continue to stay at overbought territory for a while so just because it’s reaching overbought territory, does not mean it has to roll over.
$COMPQ
Looking very bullish here on this $COMPQ weekly chart as well. I have been watching this chart as I was anticipating possible Head and Shoulders formation and it’s still possible but with the overall market being very strong, I am not sure if it’s going to play out. As you can see on that horizontal resistance line which that could possibly be a right shoulder but then again we don’t have any confirmation of roll over. Until we do have confirmation of roll over (it’s going to be at least few weeks of worth to confirm it), I remain bullish in this market. Oscillators are showing very similar strength as $DJIA.
$SPX
S&P 500 is the leader out of three as we have just broken recent resistance line and now trading above that. Keep in mind this is the weekly chart so that the last candle you see is finalized which is the confirmation that the recent resistance has been broken. That doesn’t mean it has to go up but it means it has very high possibility it will. However since this is the weekly chart, we might see retest of that resistance as new support going into daily actions this week. Oscillators are also very similar to $DJIA.
Recap
While $DJIA and $COMPQ is showing great strength but trading below resistance level, $SPX has pushed through the resistance. I continue to remain bullish in the overall market looking at the weekly chart unless it shows me reversal candle ending of next week.
However take a look at the video from Bloomberg on 1/10/13. Tom DeMark says to sell.
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Kim, I am in the wrong side of the 2013 new year rally, I didn’t long any stocks and short $AMZN,also bought $VXX. so I am in the uncomfortable zone :(. but it isn’t bad for longer term and the mkt seems really near its peak, even thought DOW could has run up other 300 points and S&P 20-30 points up??? I also hold most of percent in cash now. Now would love to know that what do you think about my situation???I appreciated it !!!
@followkim u r right.. DOW does look bullish currently and there is no confirmation as of today that its gonna change its direction. Until we get the confirmation of some kind of revesal formation, we stay in bullish mindset.. but we are at a key pivot area and probably going to slow things down this week. Also if this makes you feel any better, there is some possibilty that $AMZN might have bearish divergence on the weekly chart. again its NOT confirmed and for it being a weekly chart, it will need 2-3 weeks to confirm it so.. its long way out for the bearish divergence to play out… good luck
@2kaykim Thanks lot for your meaningful suggestion….I will try to handle and leaning from the mistakes that I made since 2013 began. also would love to have your idea that should I cover my $AMZN short position next week? I should cover it early last week when it traded at$ 262.22 then I make good gains if I did, but I didn’t. Thanks again !!!
@followkim well for $AMZN you can put your stop just above yesterday’s high if you want to hold it and see how it plays out this week. for $VXX not sure.. its your call.. its just bad place to be to be buying $VXX… ( a while ago, i heard some people on ST talking about buying $VXX because it was low… i thought that was VERY bad advice because you don’t just buy or sell cuz its low or high.. its disastrous advice)
@2kaykim I totally agreed with you that buying $VXX isn’t smart, if just because its price trade low. for me, I haven’t following someone advice,I made up mind by myself by thought that the mkt might go down for couple reason…..and I shouldn’t trade stock base on what I think ! as the traders we all have a good time w/ good profits and bad time by lose $$, and we all make some mistakes or bad decisions. For me the mistakes came early year better than later….I will learn and avoid to do same….Yesterday I felt somewhat afraid about my mistake then I had talk to you…today I shared w/ my love ones and friend they are Doctor & CPA ( no one trading stocks). after that I feel much better w/ clear mind…. I will sell 50% $VXX when the mkt pullback some points ( i’d like to hold some them for little long term for months, lets see ) the $AMZN like to follow your suggestion then wait to see how it will play before its ER. most important for me is hold on the positive attitude as I always be and learn from each of mistakes, then toward to the next move. THANK YOU SO MUCH !!! I also got reward for the mistake…Hahaha.. a very beautiful shoes. life is short and money is tool for makes our life in better freedom, better qualities and help another have better life too. Have a nice and enjoyable long weekend 🙂
Hello Kay
I just came across some data I thought was relevant to the conversation. Here is a link to a partial scan for stocks with contracting bollinger bands.
http://www.stockfetcher.com/ui2/sffilter2.php?tabid=filt_examples4&exid=4&exmkt=all
The funny thing is all these stocks are form the same sector. They seem poised to move up and some began a move today. Here is another link to a graph comparing a few of these equities to the DJIA from late 2007 to early 2008. As one can see these equities actually began a run up just before the market began it’s fall. These equities and the DJIA are near the same levels as 2007-2008 just before the move.
http://finance.yahoo.com/echarts?s=KGC+Interactive#symbol=kgc;range=20061016,20081231;compare=%5Edji+gg+abx;indicator=volume;charttype=area;crosshair=on;ohlcvalues=0;logscale=off;source=undefined;
Sorry Kay it looks like these links are not good any more. I am guessing but seems as the data is updated the results change.
The sector I was referring to is gold mining stocks with large reserves. Their bollinger bands are all tightening at the same time. Which I suppose is not that uncommon since all their fates are tied to one commodity, GOLD. But what I found interesting about the late 2007 early 2008 time frame is gold had a run up before the market crash. Perhaps an early signal. If we get a run on gold here it may well happen again.
@LittleRiver yea u know with that fiscal cliff resolution, i think market overally reacted to it and thats what got this bullish run we’ve had so far. I really think that was the catalyst of the current bullish move, if that wasn’t resolved, we be in downtrend for sure… it tough to say where the market is gonna go.. some analysts are still calling 2013 market crash and i still do think this whole bullish move has been manupulated last 2 years or so… so as I trade, I always keeping that in mind~~~
@2kaykim What goes up must eventually go down right? When is the challenge. Looks like gold is going lower to the 16oo level. I believe the lowering price of gold price is what formed the current pattern in mining stocks. As gold dropped over the past few months, the highs on these stocks dropped but the lows held firm until this week. With gold still falling, mining stocks ran out of room to run. Now they are setting new lows. I still believe this sector could be a tell for the market or not . Right now it is saying the market is going higher. I guess we will see soon enough.