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Since we haven’t had a single downtick since October 14th, I wanted to show that there is still one flickering ember of hope for any bears out there, which is the September 12/13 gap that appears on a variety of important ETFs. Below are my three favorites, and in each case, the red horizontal line is anchored to the aforementioned price gap. As always, click on a chart to see a screen-filling version.
Back on October 18th, I wrote a bullish post about Netflix (NFLX) in which I said the stock “seems on solid ground for its breakout” and that “it looks like the “gap-traverse” is definitely in play.” The traverse is about 60% done, so it’s got more room to the upside, but it’s getting closer and closer to its exhaustion point.
This morning, GM reported their earnings, and they jumped higher. I would like to point out, however, that the trading over the past month or so bears a strong resemblance to a prior instance, and that todays’ push higher has neatly sealed up an important price gap. The point being that – – this is probably about all the upside it’s got.
Preface to this post: Due to a fairly busy schedule on Friday, I am composing this prior to the opening bell. Thus, the charts are accurate through end-of-day Thursday, but the general points remain the same.
Here is the daily chart of the Dow Composite for the past couple of years. There was a pronounced gap (as with most markets) last week which was sealed during Thursday’s mega-rally.
I seriously didn’t think I’d have to do one of these “hey, when does this torture stop??” posts after the CPI came out today, yet here I am. Anyway, I’d like to suggest that this gap level on AAPL represents an important marker for when this senseless buying exhausts itself.
