I am struck by the similarity of almost all the indexes and ETFs I am looking out. Simply stated, the relief rally that I anticipated (exactly one day too soon, it turns out!) is raging away, and we’ve tacked 1300 points – THIRTEEN HUNDRED! – on the Dow in just a few days. The amount we may have left to go varies somewhat from index to index, but I’ve tinted below what I consider the major overhead supply zones for a variety of them. Enjoy!
After the market pullback that we’ve seen, of late, I thought I’d simply post the following Year-to-Date percentage-gained/lost graphs of a variety of world markets, to illustrate (at a glance) which ones are still “up” on the year (as of their close on Wednesday, August 26th)…presented without individual comment.
They can be monitored to see if they strengthen or weaken over the coming days/weeks, as a possible gauge of general sentiment for the remainder of the markets, particularly, those markets that have lost the most ground this year. (more…)
The bears had a try to make a lower low on SPX yesterday and failed into a move up that closed well above the 2SD daily lower band. The bulls have a shot at turning this back up today and on a sustained break over double bottom resistance at 1954.09 the target is the 2041 area. For some reason I called that in the 2050s yesterday but the target would definitely be 2041 area.
I ran the optic run 15min charts yesterday and I’d assess those as being neutral to bullish, with the most bullish chart being RUT. If RUT is leading then bears are in real trouble here. Scan 3x 15min SPX INDU TRAN charts:
And, voila, just three days later, the crash has been erased!
It remains beyond me while the public dives into IPOs in the throes of a bull market. Below are some of the widely-hyped public offerings over the past year or so, shown in percentage form. The results speak for themselves. And keep in mind, this was in the context of a raging bull market. Imagine what these will look like six months from now.
Yesterday was a classic lower band ride day with a touch of the 2SD daily lower band, an AM high that failed, and a gap fill and lower low. The obvious target is still the 1820 area and as long as the lower band ride continues then I think we may well make that target today. SPX closed back within the 3SD lower band yesterday, so SPX just missed a record breaking three consecutive closes below that.
For today I’d be looking for an AM high that would ideally test the daily 2SD lower band which closed yesterday at 1927. Any high under Monday’s high at 1954.09 is theoretically acceptable but I’d be getting edgy about the short case on a break over yesterday’s high at 1948.04, and would recommend being very careful with shorts on any break over 1954.09, as that is possible double bottom resistance. SPX daily chart:
That was an amazing day yesterday, and the close near the (SPX) lows delivered a second straight daily close well under the 3SD daily lower band, a feat not equalled in the 1987 crash, the 1994 bonds crash, the 1997 Asian Crisis, the 1998 Russian Crisis and collapse of LCTM, the 2000 Tech Crash or the Lehman Brothers in 2008. Why? Not sure yet though Shanghai falling to a level last seen six months ago doesn’t seem like a great reason.
Hat tip to my option trader friend Yousuf Hamid here for his prediction to me at the weekend that the next move would be a hard and fast fall to 1820. Nice call mate.