Wednesday, January 05, 2005
between S&P 1175 and 1250 lie a lot of profit points!
Yesterday was the second day of intense profit taking, and a Real Distribution Day on the major indices. As expected (and noted in several posts ago), the S&P might again test 1175, and this time round, turn its monthly chart down in the process. Subsequent behaviour will be very interesting. In particular, if 1175 holds successfully and bullish behaviour is displayed upon downturn of its monthly chart, the bull case will be intact.
Monday, January 03, 2005
S&P falters even as it staggers to 1250
As you folks know, I like to trade rather than invest. This is because trading presents so much more opportunities and forces you to focus on what the market is saying, rather than what you THINK it should say. As a result, I never let fundamental analysis interfere with my charting.
The market is clearly losing momentum. The oscillator is showing negative divergence against recent price action, and the number of new highs has lagged even as the major indices have reached new swing highs. The market can still rally for a few more days because we are not yet overbought. But technical indicators are not painting a rosy picture.
Nonetheless, as you probably know by now, if the market has an agenda, it will fulfil it regardless of technicals OR fundamentals. Everyone knows the US market is not cheaply valued anymore. Everyone knew in November and December that it was technically extended. But neither condition prevented the market from achieving new swing highs. Neither condition prevented the market from confounding its doubters.
The S&P today has staged an opening-range breakdown and is faltering even as it sets its sight on 1250. I think 1250 will be hit. If I am correct, you can be very very sure, that people will be buying S&P 1250 even as they are now selling S&P 1209.
This is just the market!!
The market is clearly losing momentum. The oscillator is showing negative divergence against recent price action, and the number of new highs has lagged even as the major indices have reached new swing highs. The market can still rally for a few more days because we are not yet overbought. But technical indicators are not painting a rosy picture.
Nonetheless, as you probably know by now, if the market has an agenda, it will fulfil it regardless of technicals OR fundamentals. Everyone knows the US market is not cheaply valued anymore. Everyone knew in November and December that it was technically extended. But neither condition prevented the market from achieving new swing highs. Neither condition prevented the market from confounding its doubters.
The S&P today has staged an opening-range breakdown and is faltering even as it sets its sight on 1250. I think 1250 will be hit. If I am correct, you can be very very sure, that people will be buying S&P 1250 even as they are now selling S&P 1209.
This is just the market!!
