Stock Market Viewpoint

Stock Market Viewpoint
Reading the Tea Leaves...

Monday, November 5, 2012

New Weekly Bar Closeup

Stock Market Technical Analysis Blog

Click on image to enlarge

In the charts above I posted the triple index market direction cluster.  To the right of the triple index I added a small closeup of each of the three to make it easier to see exactly how the interaction of the two sentiment EMAs are working out on each index.  Obviously the VIX and the TLT (Bonds Index) are still neutral as the Nasdaq had its two EMAs come closer together with the opening of today's new weekly bar.  The Nasdaq is running one week behind the VIX and the TLT because of all the continued market propping the past few weeks causing its descent to slow somewhat.

Even though most traders and investors will be looking for the new market direction to establish itself the day after election on Wednesday, the weekly bars charts which filter out head fakes in both directions can't really give confirmation of a post election breakout either way until the closing of next week's bar.

Looking over at the three right side charts the top chart, the weekly 5/10/20 of the Nasdaq, is showing the tip of the red 5 EMA below the blue 20 EMA with the opening of today's weekly bar.  The powers behind the curtain must step in and drive the current weekly bar back up a great deal in the next four days to get the tip of the red 5 EMA line back above the blue.  If they don't charge this market the next four days, the VIX and the TLT will break out to the topside and it won't be pretty for the stock market.

In the center chart on the right, the UUP (Dollar Index), moved still higher again today which is bearish at first glance but it actually bumped up against a major resistance level technically which I don't have shown tonight.  If they stepped into the stock market now it would be the perfect time to do so to reverse the UUP.

Looking at the bottom right chart we see that the obligatory over sold bounce back did take place in AAPL today causing it to move back up slightly above its red 200 day EMA line which it slipped through on Friday.

The most noteworthy thing this evening is the fact that the SPY has found support at the 108 EMA with six of the last eight trading bars including today.  Also, there is a major Wall Street firm that has been going in and out of the market at major pivot points for the past year with a 7.1M block trade on the SPY.  Today at one minute after the close, that trade came through again 7.1M SPY at 141.90.  This particular single trade has never been sent through when a new direction is showing yet.  The wall street firm that sends it through intends for the trade to be an absolute pivot point marker for those in the industry.  Considering the tremendous support the SPY is holding and also that AAPL got back above its 200 EMA line today, I have tilted slightly to the bullish side on stocks tonight but with caution because you can easily see on the triple index chart above that this pivot will be a real squeaker whichever way it goes.  Just about like the election itself.


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