Stock Market Viewpoint

Stock Market Viewpoint
Reading the Tea Leaves...

Wednesday, December 12, 2012

Neutral Market Close

Stock Market Technical Analysis Blog

click on image to enlarge

The biggest thing in the market today was Bernanke's ramping up of QE3 with increased visibility.  The market's first reaction was positive and it rallied but after further analysis the sentiment developed that the only reason that Bernanke would have gone a step further in the free money program is that he knows we may be heading into a recession the first half of next year.  Stocks pulled back to pretty much neutral into the close.

Looking at the charts above:

  • Nasdaq, Chart 1:  I applied longer term channels to get a bigger view.  It shows the resistance the Nasdaq has had the past couple of days but also note we closed with a hammer candle being supported by the center line of the horizontal channel.  
  • VIX, Chart 2:  Also closed neutral, it may drop back into the stock friendly channel at the open or it could start the move back to the high channel.
  • VIX, Chart 3:  The large EMA pushdown was a little overdone yesterday causing the VIX to pull back up some today but no indication for tomorrow. 
  • AAPL, Chart 4:  Following up from last night's discussion of the day 5/324 setup they are constructing, today's sag in AAPL helped the 5 EMA line continue to construct a dish pattern of the line itself which is what technicians want because it implies a sustainable upward move but beware that when the 5/324 are compressed it would not take much bad news premarket to start the tip of the 5 down through the 324 which would trigger big sell programs.  If AAPL starts gradually rising tomorrow and a little more the next day then the dish will complete and AAPL will have its double bottom in to go higher thereby pulling the market up with it.  This will be a close one.

Blog Archive