Not one day does a trend make, unless it is the first day of January. Should we be surprised by such strong move today? Not necessarily, remember ony 63% of the time the Jan 1 move was in the same direction as the last trading day of December. Also remember that, without exception in the last 10 years, whatever Jan 1 did a trend was based off of that day, the shortest one being 3 days. What I didn’t check was to see what kind of resistance those mkts. had.
Cash21 has a feeling that we will see some decent jobs numbers on Thursday. If he is right, we could really see a strong up move. I believe this because we have had this current rally with terrible jobs numbers. Sure they have been bte, but they are still awful anyway you slice it. So if we see some confirmation I think it will be plastered all over the place and money will flow into this mkt. That is also a great time for big $$ to look for selling opportunities, after playing the up move of course. On to some charts:
As I said on the video, I think that the $16 – $17 area is a very logical zone for the VIX to end up in. There is very good support at $16. Notice the RSI is making a series of lower highs, and it is in a pretty apparent down range right now. Early on today it seemed oddly strong before finally selling off.
I actually expected quite a bit more v today. Perhaps that guy who ran in through the out-door ( Raspberry Beret, Prince 1986?) in Jersey made all the traders late getting home. Either way there has been a four-day up trend in v and a clear breakout to the upside. If you note that down trending blue line we are near, that is drawn on the highs of the day in a down trend starting with the Oct 07 high. I usually use the bodies, but we have long since smashed through that. I don’t know how strong of resistance this will be, if any, but we need to be aware of it none-the-less.
The NAS gapped up and stayed up. It doesn’t look like much, but percentage wise it did better than the others, sans the RUT. And this after a beauty of a bearish engulfing candle, albeit on low v. I don’t think it is too often that bearish engulfings near top bb are ignored. So if we continue up, like we have in the past, that will be impressive.
The SPX took out the 50% fib and the up trend line. There is a lot of open sky right here for an up move. But again, I harp with the being oversold for so long. It didn’t gap up, but is definitely showed strength today. I am very surprised that 50% fib did not offer a lot more resistance, I was pretty confident it would.
From the weakest to the strongest. Seasonally this is the heart of strength for the RUT and it is showing it. It sure looked like it was giving up the ghost in Nov, and now we have a pretty clear breakout here. Note that once again the long-term down trend on this w chart. It could certainly offer some resistance.
UUP is in the zone here, the gap zone. There was a nice little v spike with the move and it seemed to have bounced off of the 20 ma. Looking at the past buying v, I would expect to see another spike of buying if we get down to the $22.50 area. But, I expect this gap to offer support, so I think we will likely see some strength in the $22.75 area, and I may be looking to buy this there.
I have been watching this for a while; I like the re-test of the neckline, but it is now caught between the 200 ma and the neckline. A move up with some v and play up, a move down below 200 ma and short to $13.50 area.
You can see a series of lower highs and with shorter time periods. But what really intrigues me is that we have lovely bearish engulfing candle followed by a bearish harami. This thing really looks like it wants to drop soon to me.
In closing: Based on my short-term research, I think we will see some more up move tomorrow and perhaps the rest of the week. Today may have been the bulk of it, but if we get much bte numbers during the week, it may have been just a taste of what is to come. Yes, I still think this mkt. is clearly overbought, but as I have said before it can stay that way for a while. Trade well and prosper. AKOT
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