GDP Pullback

Stock Market Technical Analysis Blog

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In the market today we had a modest pullback after participants were surprised by the contraction in the fourth quarter GDP.  This doesn't necessarily mean the market will start to pull back as their determination in pushing this market higher has not been seen since the first quarter of 2004.  In the chart cluster above, while the VIX continued rising the S&P reversed in the last thirty minutes showing its resistance to dropping back down into the black channel.  Tomorrow's another day...

Alan

Another Notch Higher

Stock Market Technical Analysis Blog

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In the market today we saw the VIX resume its short term upper channel as the S&P climbed a little higher also.  Looking at the first chart cluster, the short term S&P and VIX, we see the S&P sliding up its ascension channel while the VIX caught its lower channel line and resumed upward in the late afternoon.

In the second chart cluster, the midterm look, we see that the S&P is trying to work its way up in the inner blue line ascension channel that could take the S&P to the 1560 to 1570 area if they can keep the slow melt up going.

In the third chart cluster, the long term chart of the S&P, I marked in the number of years in each up cycle and down cycle as it shows us approaching the top  of this up cycle.  The multi year down cycle has widely varied after each time we touched the upper channel line as shown in that chart.

Last cluster, trendline chart of AAPL, we see that so far they are successfully keeping AAPL above its lower horizontal channel trying to mark it as a bottom in AAPL.

Alan

Market Sideways...VIX Rising

Stock Market Technical Analysis Blog

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In the market today we started to see the sideways trend in the S&P 500 as the VIX has started rising, shown in the upper chart cluster.  A little caution must be taken here, it seems like the mass of the traders feel like they are going to peg 1550 before it's over on the S&P but any time the majority think something is going to happen, that is usually when it doesn't.  1500 may be the top but it may take a few days to see if the VIX will settle back down or if it's giving us a warning right now.

Alan

Another Day, Another Notch Higher

Stock Market Technical Analysis Blog

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In the market today we saw another day of modest gains from the continued melt up of the market as they continue to force a few more shorts to cover their positions each day.  Looking at the upper cluster, the S&P is at its upper line of its 4 year mother channel but looking closely there is a steeper inner blue channel for the past 18 months that if they use it, it could take the S&P up to its all time highs that are shown in the middle chart, the 35 year chart.  In the bottom chart AAPL is about to enter its next lower channel.

Alan

S&P Rings 1500 Bell

Stock Market Technical Analysis Blog

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In the market today we saw the S&P melt up continue as it traded briefly above the 1500 level while AAPL closed $10 lower than its $50 gap down opening.  Looking at the top cluster we see that the S&P has finally hit the upper line of its 4-year mother channel while the VIX is touching down on multi year lows.  The lower chart is the long term trendline chart of AAPL showing the next channel lower.

Alan

AAPL $50 Billion Flush

Stock Market Technical Analysis Blog

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In the market today we had another jubilant day of market melt up closing modestly higher but after the bell it was a different story...Enter AAPL's earnings call which cost the company approximately $50 Billion in market cap as it plunged $50 after hours.  It's looking like an ugly open tomorrow.

Alan

Market Free of Debt Battle...For Now

Stock Market Technical Analysis Blog

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In the market today we saw enthusiastic lift in the indexes as the market became comfortable that they are indeed going to move the debt ceiling battle out another three months with tomorrow's vote.  This is a huge relief for the stock market.

In the upper cluster we see that this development allowed the S&P to break out of its recent range, which brings the need to look at the bigger picture shown in the lower cluster.  Looking at this long term chart of the S&P we see considerable room left in the S&P's 4-year mother channel.  We still have to deal with the program cuts part of the fiscal cliff by March 1, but for the time being they have stuffed the cat back in the bag and the mice are free to play.  Also, AAPL printed a bullish reversal candle today, even it may find some love.

Alan

S&P Popped Above September High

Stock Market Technical Analysis Blog

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In the market today they finally popped the S&P above the red line as I mentioned I was looking for them to do that back in my Jan 10th blog.  The VIX started to curl up some today as the S&P broke through the highs.  In the lower cluster we have a mixed bag of the short term channels on the indexes.  A lot of people sold into the pop at the market open today as the TRIN shot up to the 3.0 level during the first thirty minutes.  Once again we will be watching the VIX to see when the push is done.

Alan

Prop-o-rama Snooze Fest Continues

Stock Market Technical Analysis Blog

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In the market today we added another day of sideways propping as the VIX continued its tap dance  along the red market overbought line.  AAPL, however, did get the bottom bounce off of the technicals I discussed in last night's blog for a $20 gain today.  Whether or not this is THE bottom  in AAPL won't likely be determined until next week's earnings when we see if all the pessimism over its declining stats are reflected in its quarterly earnings report.  It's reasonable to expect this morning's bottom to hold at least until then. 

Alan

Market Sideways Again

Stock Market Technical Analysis Blog

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In the market today we saw more sideways movement of the S&P and VIX as shown in the upper cluster.

Looking at the AAPL charts in the lower cluster we see that they decided to pass on the short window for a surprise jam on AAPL today and it appears that they may be waiting for three key technicals to coincide tomorrow or Thursday.  The first technical to help their chance of turning AAPL back up tomorrow or Thursday is the fact that AAPL closed today at the lower line of its original ascension channel that goes back four years as shown in the lower right chart.  Two other technicals that could be strong tools to reverse AAPL is that AAPL is poised in a "bounce or cross down through" line situation with its 100 and 200 EMAs and also its 100 and 200 SMAs shown with the brown and black lines in the left side charts.   If AAPL actually loses the lower line of its original very gradual uphill sloped channel going back to the beginning of the four year AAPL run at the same time it suffers a 100/200 EMA down cross and a 100/200 SMA down cross the future of it as an investment will be questionable looking forward.

However, if they take the synchronized lower line touch down and both the EMA and SMA bounce situations and jam AAPL big they will have some really strong, quality technicals to turn it back up with.  They better not hesitate here as there are hundreds of points of airspace below AAPL if these three major technicals are lost in the next few days.

Alan

VIX Treading Water

Stock Market Technical Analysis Blog

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In the market today we saw the continued sideways movement of the VIX at the lower market  overbought line while the S&P is starting sideways at its upper line.  Not much to talk about yet but AAPL is about to get interesting.  Looking at the lower cluster above, AAPL actually dropped through its Day 432 EMA safety net line this morning which has been used to bounce the market and closed today underneath the line but did find support on its lower channel line shown in the lower chart of that cluster.  Considering the short interest has got to be increasing by the hour tomorrow would sure be a prime day for them to surprise the market and jam AAPL back above its 432 and have a broad market short squeeze day.  We will have to see...

Alan

SPY Short Squeeze

Stock Market Technical Analysis Blog

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In the market today they decided to apply the pressure on the shorts and succeeded in a powerful short squeeze taking the S&P 500 to its September high which is also a five year closing high for the S&P 500.  As determined as they are to get this market as high as possible before an ugly earnings season and the real fiscal cliff battle in February it would not be surprising to see them break it above the September highs before they are done.  Nonetheless, it probably won't be long before some of the bulls start cashing in on the seven-week run.

Alan

Tap Dance on the Lower VIX Line

Stock Market Technical Analysis Blog

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In the premarket session this morning APPL started selling down which they immediately counteracted the disappointment by jamming the SPY upward premarket giving us a moderate up day in the market as the VIX continued sideways on its lower channel line.  Sometimes the VIX can go sideways at the lower channel line allowing the market to stay overbought far longer than a lot of shorts can stay short.

Alan

Like Watching Paint Dry

Stock Market Technical Analysis Blog

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In the market today they allowed another day of measured selling, with most of the market being stale as everyone waited and watched for the AAPL Day 5/10 that I discussed last night to resolve itself.   We'll have to wait another day.

Alan

All Eyes On AAPL Tomorrow

Stock Market Technical Analysis Blog

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In the market today the indexes started to slowly arch over as the VIX traded sideways at the red long term overbought line shown in the charts above.  I pasted a daily bars chart of AAPL on top of the S&P and VIX charts showing the pivot AAPL will be at tomorrow morning.  If AAPL's red 5 EMA bounces up from its green 10 EMA line AAPL's chart could be back in business.  However, if the red 5 EMA  pierces down thru the green 10 EMA line tomorrow it will likely put AAPL back in sell mode.  Which way AAPL plays out tomorrow will be important to Wall Street as they would really like to put a positive day on the last day of the traditional first five day push.

Looking at the VIX by itself it's important to note that market selloffs typically don't start until the VIX starts rising up away from the red line.  The  VIX can easily hold sideways right at the red line allowing for additional upward stock market movement sometimes for a surprising number of days.  The day it starts lifting quickly from the red line is where the broad market selling begins.  Note that  in March of 2012 it spent three weeks basically sitting on the red line before finally starting to lift convincingly which triggered the selling days.  We will have to see...

Alan

VIX Below 14

Stock Market Technical Analysis Blog

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In the market today we had the third day of the traditional first five day push.  Once they have the first three days up they almost always make it to the fifth but with the VIX closing at 13.83 which is almost right down to the long term overbought red line (shown in the chart above) Monday's outlook leans toward a neutral feel and the day will probably be susceptible to having the good or bad news taking control of that day's close.  

Alan

Fed Minutes Scare the Market

Stock Market Technical Analysis Blog

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In the market today we had the slightly downward consolidation that was expected but in the early afternoon we got the unexpected when the Fed minutes were released.  The market has priced in "QE to infinity" as it was called after the last meeting but abruptly found out that several of the Fed members are saying they want to end the QE program this year.  Seconds after the release the market dropped sharply as participants realized that we may now have to price in QE ending by December which means the market direction may turn to the downside.  Counting on the first five days push to continue is like rolling the dice now.  I mentioned last night that this market wakes up in a different world every couple of days and tomorrow it will for sure as the media will probably start discussions on how we now have the countdown to the end of the QE program which is 100% responsible for the market being as high as it is.  It will be a one day at a time market now, the end of the QE program will be a very serious event.

Alan

First Five Trading Days Push

Stock Market Technical Analysis Blog

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In the market today we had one of the largest gap up opens we have seen in recent history followed by mostly sideways trading and then a slightly higher close than the opening numbers.  While the Nasdaq, S&P, QQQ, and SPY charts have diverged in recent weeks from index propping and overselling of AAPL, I feel like it would be best to focus on the S&P 500 Index vs the VIX to take a broad picture look of where we are at tonight.

First note that the charting software data suppliers have chosen to show today's trading bar as opening at Monday's close and then climbing all day.  Even the digital readouts give the S&P as opening 1426 and closing at 1462.  The reality is that 80% of today's move was done at the gap up open and then they added on a little more into the bell.  If you follow the market using professional software long enough you will be aware that they take this liberty when they are absolutely bent on taking the market higher the next few days no matter what.  I have learned from personal experience is that when the charting data feed is being manipulated you do not want to stand in the way of this bullish force.  They are intent on making the first five trading days of this year a big run and then will remind people next week of the historical data that shows 85% of the time that the entire year in the market goes the same direction as the first five trading days of the new year.  

Looking at the S&P heavy black line channel above it's easy to see there is space for 3-4 days of upward run before reaching the upper black line.  Especially considering that one of the days will have to be a consolidation day, most likely tomorrow.  Looking below at the VIX, it is also easy to see we have 3-4 days of space for downward movement before it hits its red floor line.  Add to this the fact that today is just day two of AAPL's latest 432 EMA line bounce that I called out on twitter on Monday morning and you would have to say that the bulls have the wind at their backs for 3-4 days.

However, a closing Advanced Decline today of nearly 5500 indicates the move should / really needs to have a pullback or sideways consolidation tomorrow before we could higher another couple of days.  They may use the technique that they used often in July & August of 2010 where they were able to get the Advanced Decline back down near the -2500 buying level from a 5000+ overbought level the day before by coordinating a slight drop in virtually all of the small cap stocks right at the open while simultaneously juicing the mega caps which produces a low buy area Advanced Decline at the open without giving back almost anything on the indexes because of the market cap overweighting of the mega cap stocks.  

Also, the other reason for first five days of the new year push is to entice as many investors as possible to put new money with their financial managers from their end of year bonuses.  Having said all that, the market has been developing a habit of waking up in a different world every couple of days lately and it is extremely jittery about any bad economic news.  Notice however, that during these multi-day pushes there has been a pattern of bad economic news virtually disappearing like magic until the move is over.  We will have to see...

Alan

Difficult Half of Fiscal Cliff Postponed to Late Feb

Stock Market Technical Analysis Blog

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The agreement to be voted on today would raise taxes on couple's income over 450k, extend unemployment benefits, and postpone the dreaded across the board spending cuts battle until late Feb.  The 2% payroll tax increase starts coming out of everyone's check this week.  Geithner found a small program they can stop funding for 2 months to allow postponing the debt ceiling battle until late Feb also.  This essentially sets up a double fiscal cliff for late Feb.

In the first row of charts above I have posted year, quarter, month and week candles of the S&P 500 as all four completed last night.  In the second cluster we see that the Nasdaq has almost made it up to the blue incline channel and the VIX briefly came down into the blue channel but closed at the top line.  In the third chart cluster, the SPY closed right up underneath the lower line of its 18-month uphill blue line channel.  APPL reentered the upper half of its 2010-11 black line channel.
  In the next cluster, the upper six charts show the sentiment EMAs on the Weekly bars charts of the indexes with the Nasdaq essentially neutral, the S&P and DOW slightly bullish, the VIX morphing into a merge after the upcross on Friday, and the TLT (Bonds ETF) at a slightly bearish merge.  The candles below it show the engulfing Day candles on the indexes and the VXX.  In the last cluster the VIX fell almost back down to the red sentiment EMA on the daily chart.  Beside that we see that AAPL closed yesterday right up at its gold Day 324 EMA line which will be a real test for it tomorrow.  Once again, they bounced AAPL up from the Day 432 EMA at the open yesterday to give them the broad market lift that was really needed yesterday.  The seven charts below that are the short term channels on the indexes.  Most notable is the Nasdaq barely regaining its Nov/Dec channel, AAPL breaking out of its Dec downhill channel, VIX well back down into its channel, and the problematic UUP (Dollar Index) still rising.

Looking forward to the first five trading days of the New Year which Wall Street almost always tries to drive the market up as they are historically an indicator of how the year might go also.  It would be reasonable to expect that these first five days might be upward but when the media starts focusing on the late Feb agenda the market could turn ugly as that is the real battle, as what they are voting on now is essentially what was assumed would be agreed on all along, and is the easy part, they just had to go through the political posture bargaining process to narrow down to the final numbers.

Alan