SPX made a new all time high yesterday, so the stats I posted a month or so ago for what had happened in the past after big 5 DMA bull runs have now all played out, with everything within the expected ranges. This is a good illustration of why it’s often worth crunching some numbers after a rare setup like the all time record run in November of consecutive daily closes above the 5 DMA. The last small thing to take away from the chart below is that I would expect a minimum of two more daily closes above the 5 DMA, which should be over 2070 SPX by the close on Friday. SPX daily 5 DMA chart:
Over the last four weeks, since SPX broke back below the 5 DMA after the (all time longest) run over it from the 1820 low, I’ve been using the stats from the largest previous runs to call the likely moves afterwards. We are almost at the end of those stats now, with the last part being to make a new high. That’s already been done on globex overnight but needs to be done in regular trading hours as well.
After that’s done I’d mention that the shortest run over the 5 DMA from a significant low this year was eight days, and we are currently on day five. By day eight I’d expect the 5 DMA to be well over 2060. SPX daily 5 DMA chart:
Today is the first day of what is in effect a two week holiday trading period into Friday 2nd January 2015. For most of this period volumes will be low and the lean will be bullish. The historical stats for today for instance are that it has closed up about 76% of the time. That said SPX needs some retracement or consolidation to establish a rising sustainable support from the last low. I was expecting that on Friday but we may see it today or tomorrow instead.
A decent rising channel has been established from the 1820 low now and the 60min buy signal at the low has made the target at the 70 level on the RSI 14. I am expecting a new all time high on SPX as the last part of the stats from the post 5 DMA runs, but that needn’t be done today of course. SPX 60min chart: (more…)
This market has had the “market” beaten out of it. If I had any sense – – or, more precisely, if I had the sense to not have any sense – – I’d just throw charts and reason out the window and dump my entire net worth into SPY calls so I could spend the next ten years cleaning out my nostrils. But I’m not dumb enough to be smart, so I can only sit back and watch, slack-jawed.
Take the chart below, for instance, from which I’ve removed the price bars; I merely show a trio of exponential moving averages (50, 100, 200) against the S&P 500 index.
That was an amazing move yesterday and the double bottom target at 2060 on SPX was hit just before the close. That was rather faster than I had expected, and ES even made a new all time high overnight. ES made it back to over 70 handles over the 45 day pivot (1997.08) again overnight and so was back in Crazytown, where ES has spent much of the last few weeks. I’m expecting that ES may spend much of the rest of December there as well.
What are the odds of retracement today? Well I have a rising channel from the 1992 SPX low and as and when that breaks, most likely today, then I’ll be looking for some retracement. SPX 1min chart: (more…)
SPX closed back over the 5 DMA yesterday and unless a war starts in the next few minutes, looks likely to gap up hard at the open today. Bulls need a green day today to confirm a likely retrace low and after that SPX should be off to the races for the rest of December. If this is a true breakaway gap then the opening gap today will not fill. Daily middle band resistance is at 2045. SPX daily 5DMA chart: