Stock Market Viewpoint

Stock Market Viewpoint
Reading the Tea Leaves...

Monday, November 22, 2010

A Mixed Day... 11/22/10

Stock Market Technical Analysis

Click on above images to enlarge

In the markets today we saw a bearish opening as the sentiment regarding Ireland's bailout worsened.  The bears seized the opportunity and took control of the market early on, but not without a struggle as trading was choppy at a negative level.  As the day wore on the bears tightened their grip and we sold down considerably until midday when the bulls established a new not so aggressive 4-day channel shown in blue on chart 11, a compromise from the steeper pink channel they were working yesterday.

Chart 1:  we dropped back out of the uphill brown channel again but in the afternoon rallied back up to the brown line once more.

Chart 2:  the VIX last night was at a double channel pivot point and is pretty much still at that pivot point tonight.  It needs to either drop down into the red or brown channel and move in it or pop back up into the blue channel and move in it to give us a firm market direction either way for the next week or so.

Chart 3:  the dollar caught a small bounce this morning but pulled back in the afternoon assisting the bulls afternoon effort to bring the market back up. 

Chart 4:  during today's 4 trading bars we dropped back down to the pink descending channel of the past 2 weeks but found support at its upper line and allowed the bulls to take back control of the market in the afternoon.

Chart 5:  the 5/10/21 interaction (red/green/blue lines) improved somewhat today in that instead of the red 5 being stuck underneath the blue 21 as we were last night, this evening we see all three moving averages restricting to a point which has no bias but implies a sudden strong move in either direction is coming.

Chart 6:  the VIX 5/10 chart shows a firm downward cross which is bullish as long as it follows thru tomorrow morning and doesn't have a nasty gap down from the opening tick that could twist the 5 EMA back up above the green 10 MA line if the gap down is deep enough.

Chart 7:  the 2 hour candles chart shows that today's second candle found support at its 150 bar EMA and lifted throughout the afternoon but notice that it stopped up against its 40 MA line as it did yesterday afternoon also.  If you look back to 11/15 in that chart you will see the light green 40 MA line was also resistance there.  This is a fairly firm intraday resistance level for the time being.

Chart 8:  the daily candles show that we are using the light green 40 MA line of the daily chart as firm support for the past 5 trading days leaving us with the situation that we are range-bound between the daily chart & 2-hour chart.

Chart 9:  the weekly candles show that this morning's selloff found support at the dark green 10MA line and rallied in the afternoon up from it.  This was also the intraweek support last week as seen on its candle and once again we closed above the black weekly 200 MA line.

Chart 10:  the 30 min. advance/decline breadth indicator shows that we sold down to the shallowest byline and rallied back up to the black zero line at the bell.  Normally this would be bullish but the descending fine red line above it is having some control over the market for the past several days.

Chart 11:  the 30 min. S&P bars chart shows that the bulls adopted a not so aggressive channel by connecting the 3 points of the bottom blue line today giving up on last night's quite aggressive pink channel that I've removed.

Chart 12:  the 30 min. S&P intraday moving averages chart shows the red 5 EMA was just barely caught by the orange 324 EMA at midday today.  Allowing the S&P to pop above the red 108 EMA.

Chart 13:  S&P 500 with the opening of the new weekly bar we can barely see the dip and rally back up but once again today's low found support at the longterm brown line channel.

Chart 14:  the Dow shows that the new weekly bar found support midday today at the lower line of its longterm brown line channel.  It looks to be the case that on the S&P and the Dow that the bulls really want to hold that lower brown line of their respective longterm channels.

Chart 15:  the NASDAQ - overall this chart looks the most bearish because it has been stopped twice at the lower line of its blue longterm channel.  The new weekly bar actually held its ground and didn't take the dip and rinse that the S&P and the Dow had.

Chart 16:  UYG big financials ETF - shows that the bulls are trying to build a floor at the 55.75 level.

Chart 17:  S&P qrtrly bars chart - no noticeable change today.

Chart 18:  S&P monthly bars chart - no noticeable change today.

Chart 19:  S&P weekly shows that the bottom of today's dip found support at the red 10 EMA line.

Chart 20:  S&P daily chart is at exactly the same pivot point with slightly upward bias as we had last night in that the 2 lines are compressed together for another day.  The red 10 EMA is on top of the 20 which gives it a bullish bias and having the tiny dragon doji bar at the tip increases the bullish bias a little more.

Chart 21:  S&P 2 hour bar chart shows it is also in the same position as last night in that the red 10 line is still trying to cross above the green 20 line.

Overall, we are still at a major VIX pivot point (2) with the S&P hanging on for dear life to its brown 7 month up channel (1) but considering that the weekly NASDAQ chart looks to be starting another run at the blue channel above it and the S&P & Dow are finding footing when setting on the lower line of the their longterm channels.  The bias feels modestly bullish this evening but we have a lot of serious economic problems in the news and any really bad developments premarket could easily tank the market considering how high up the NASDAQ summation index is and how high the percentage of stocks above their 50-day moving average is.  It could be a day by day market until the VIX picks a direction and goes with it.