Today is Monday November 9th and I wish I would have updated my blog over the weekend.
Well, I can’t cry over spilt milk now. Actually never really lost any milk. Let me explain.
Over the weekend, I was thinking about which direction this market was really going to take. I could see on Fridays close their was not going to be any big changes by mid day and that we were going to close the session neutral. I was talking to a trader on Friday and made that comment to him after a target area was hit.
Sure enough, we closed pretty flat and or neutral on the session. Earlier on, we did hit a target area that I picked out from the previous day. Fridays flat day built up a lot of positions on both sides of the fence and as I commented a few days ago, that the “Market” was soon going to show its hand.
Today gave us a little more insight. It sure looks like the 50% mark will be completed and are currently less than 100 points away from doing so. As I was saying a few weeks ago, “So close, but yet so far”.
Todays close on the Dow was 10,227 and the exact number on the 50% mark is 10,314. So, that is 87 points away. It sure is going to be interesting to see what happens after that number is hit ? The S&P’s number is 1120 and that puts us at 27 points away. With the average S&P point equivalent to about 10 Dow points, we are 270 Dow points away, based off of that relationship. That right there would put us up roughly 200 Dow points over the 50% mark if the S&P hits its 50% retracement point.
It is clear to see that investors are running a bit scared, but not scared enough to stop buying. They are buying quality issues as represented in the Dow. I mentioned this a couple of weeks ago. It does not always mean the rally is over, but it is rotating.
One thing I had heard was, that Jim Crammer on Mad Money (TV Stock Show) was saying that he was bearish. Then I looked up the sentiment numbers on Market Harmonic’s and saw that the bearish sentiment did increase by 2.5% last week. That tipped me off, that there was a high degree of likelihood we would in fact at least see one more push to 10,314 on the Dow.
We made it through October, typically the worst month on record for the Stock Market, a plus. Would it not catch a lot of bears off guard if the Markets shot up to the higher range of its retracement levels of 62%. Now that would get some attention and all the bears by then would turn Bullish, a clear sign a short-term top at least may be in place?
Here is Thursdays statement from my blog for the days ahead:
Let me spell this out, very clearly. The Dow and S&P have to break a new high to keep this thing alive and It needs to happen here soon. If the last pivot low on the Dow and S&P get taken out, you are going to see a lot of selling. More than we have seen in some time. That is the long and short of it. The market can do what ever it wants, I only identify that there is overhead resistance just above us. If it gets taken out and a rally comes in, great. That is what I like to see right now anyway. All I know is, the move from the March lows has almost been satisfied by retracing back 50 %. (S&P 1120 and Dow 10,300) I don’t know what that is going to do to the overhead resistance? Will it be that if it gets broken, it will clear the way for yet higher prices, no one knows?
Just wanted to put Thursdays comments up. It still hold true. investing with long-term money I would stay invested as long as the Dow and S&P do not make a lower low and so far, they have not. The Nasdaq on the other hand has. The broken support can act as resistance as it trades back up into the overhead supply. We shall see, it is almost like a “Thriller Mystery”, or maybe a better comparison is “A Big Time Wrestling Match”, where the outcome has all ready been decided, it’s just that we the public don’t know it yet. That is a topic for another day, but I would say and interesting point for conversation.
Below is a cash chart of the Dow, S&P and NASDAQ Index’s. Actually, it is a short video, showing the three charts side by side. I have a few clear turning points based on this time frame as well. Also, I have some circles marked, showing the occasional reversal by what I call a “Tail”. I did it in an hourly chart, then changed it to a 2 hour chart. Still about the same. No big deal, but at those tail or reversal point, usually prices turn in the opposite direction. Another example of flushing out the public first before the money can be made, against them, (the public).
Currently we have established the highs and lows, so making any trading decisions will not be that hard to spot. Before the market changes direction, it will not be obvious to most people, that is why, when prominent people on TV start talking about new directional changes, I automatically think the other way. It has always been like that. Over decades, I remember “Time Magazine” making and calling tops and bottoms, always wrong. Newsweek the same, once it is obvious to the public, only then will the market turn against them. That is how the game works. Those who don’t know how the game is played, GET PLAYED, dont’ let it be game over.
Related posts:
- Key Stock Market Turning Points
- Contrarian Thinking for Today Stock Market
- Called the Stock Market Bottom!
- Red Alert, Large Stock Market Drop Approaching
- Stock Market Recovery Bubble
Tags: stock market
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