Today is Thursday November 4th, 2010 and we saw the extension of yesterdays closing break extended to today’s session in new market highs across the board with the Dow + 220 and the S&P + 23.
Well, we finally saw resolve to the upside as I have been saying for some time. Support had been holding and all the news was out, so the last thing was for the market to do its thing and it did. I would say, it took a little longer than I thought, but in retrospect I can see why. The main point is that support held until the final break took place and I had reported that all along the way. I gave a few parameters that needed to stay in tack for this extension to continue and we stayed well above those levels.
Yesterday we saw another gap filled just before the take off after the Fed announcement and must have made it like 10-12 gaps filled in a row. It pays to watch for that, but today we have yet another large gap. Will it to be filled, say by tomorrow, which has been the pattern? Well that we don’t know yet, but what we do know is that we are 1.25 points away from hitting the long awaited target I had been calling for since the market bottom.
I was waving a flag saying this market was not going to drop back in late August, but everyone was jumping on the band wagon that a crash was coming from those levels. They were sighting things like the “Hindenburg Effect”, which was giving signals that a crash was coming as well as a list of other reasons. I knew and reported that it was not likely and very improbable it was going to happen and was stating just the opposite.
A very large rally was coming and would take the masses by surprise. The current price then was S&P 1040 and wrote many times in my blog that a confirmation would be given that we are underway once 1060 was breached. You can go back and read by blog posting then to see it as I am saying. That is not the first, second, third, forth or even fifth time this last year I had called ahead of time a large market move, before it happened.
From the 1040 area, which was the initial break and confirmation at 1060, that puts this move at +180 and +160 S&P points from that call in late August early September. The target was S&P 1220 and we are currently at 1218.75. I would say, the market could go a little higher, but once we hit the 1220 number, I would call that one filled.
Being able to call the daily market is really no difference than calling an hourly, minute or tick chart. The movement is the same as the market is fractal in nature. You will see the same type of moves in all types of time frames giving you results that you can come to expect. If this, than than can be expected, as price builds into discernible formations.
I would love to see the market continue to move higher as I said earlier, but from this 1220 level, I see resistance coming. The market sentiment would say that there can be more. The trend is up and we will see how this move here at the upper end of the channel will express itself.
Currently the Investor Sentiment did move up and is currently only 46%. It moved up a whole 1% since last week. Their is still 9 % to go before a market extreme is reached and would suggest higher prices are possible. That is all I can say once 1220 is reached, likely tomorrow.
Given the potential additional room and being in traditionally a strong market month, “November”, we could see more over the next few weeks. I will say that what I was looking for has been satisfied and leave the rest the others who want to call the exact top. I may give commentary on this ahead as I look at my work, reading the daily market, but I feel satisfied in reaching this verbal target.
Tentatively, I see big trouble ahead and it is some pretty scary stuff, but nothing as of yet. I will let all my readers know when the danger zone for a market crash is at it highest and most likely, but again, currently all is well. Don’t let your guard down though as in the weeks ahead, things will change. How fast, I can’t say at this time, but I should be able to see it coming ahead of time, just like I have called all the major market turns this last two years since I have been writing my blog.
With all that said, I started late today following the markets, around 11:30 am West Coast and did have a loosing day. I was up against my daily loss limit and did elect to take a small recovery trade to lessen the damage, but I just gave up towards the end. I saw myself trying to force the trades and I knew I was out of sync. That is to bad because today early on, we had some real easy market reads and know if I was trading early, I would have hit those trades for some early points.
That did not happen and felt the afternoon pressure of time running out on me, as for about an hour, things went very slow. There, I just needed to wait it out, but I got anxious and tried to force trades, not entering where I should have. As I look to my indicators, they don’t line up at all. That is not the method but a guild to show me that I am off in my entries. It happens and it happens to everyone. If you have an off day, just don’t let it be a wipe out day. I am up more than enough since my weekend hold over and score of 10-12 points on good size, something I rarely ever do, but did to try and capture the move like we had today.
Tomorrow is a new day. I need not be concerned of trying to get even, the new gains will take care or those. Good trading to all.
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