With Wednesday as “the big day” this month, I wanted to take a look at the recent intraday history of the /ES and consider winning points for bulls and bears alike. After all, in spite of the big swoosh higher the past couple of days, 2014 has been pretty much a stalemate. Here we are, nearly a quarter-done with the year, and the Dow is still down 0.45%. Of course, broader indexes are more impressive – the S&P 500 up about 2.25%, and the Russell 2000 is up nearly a full 5%. So here’s what I’m seeing for both “sides”:
1 – Failure of market to continue late 2013 rally – BEARISH – 2014 started off on the heels of a massively-strong 2013, but it just petered out
2 – Support at intermediate-term trendline – BULLISH – After swooning magnificently in late January and early February, the market found support at an important supporting trendline. Breaking this line is crucial if the bears are going to have anything more than penny-ante dips in 2014.
3 – Breakout above 2013 high – BULLISH – Finally, the market burst above its 2013 highs, and the bulls got new-high fever again.
4 – Sudden reversal of market strength into sawtooth downslope – BEARISH – The rush higher was short-lived, and we started cutting lower in a series of lower lows and lower highs, although not with the resolve of the late January plunge.
5 – Failure of breakout price – BEARISH – To augment this, the horizontal line noted in #3, above, was broken, creating a failed bullish breakout.
6 – Strong resurgence on the flimsiest of reasons – BULLISH – Most recently, the market has been rocketing higher on lousy economic news and pledges from Putin that he’s not going to plunge the world into a nuclear war: if the lack of war is all it takes to make the market rally, that speaks to the rally’s persistence.
So………..three to three. I suppose Mr. Yellen will break the stalemate tomorrow, one way or another.
