S&P Closes At Lower Line of Ascension Channel

Stock Market Technical Analysis Blog

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In the market today we had a second day of pullback bringing the S&P back down to the lower line of its narrow ascension channel.  The VIX ran up to its uphill blue channel but then pulled back substantially in the afternoon.  Looking forward to tomorrow it is obviously bearish that the VIX shot up so high when all we did was drop from the upper to the lower channel line but on the other hand it's bullish that the S&P did not breach the lower line of the ascension channel and it is also bullish that the VIX tried to enter the uphill blue channel but failed and pulled back down away from it a great deal.  Everyone will be watching to see if the S&P channel holds and the VIX continues its retreat tomorrow.

Alan

Fed Minutes Rattles the Market

With the release of the latest Fed Meeting minutes today, we learned that there is a possibility that the punch bowl may be taken away long before December.  The market did not take this well at all, will have to see how this plays out.   It will probably be another couple of days before I will be putting up charts again nightly.

Alan

Big Up Day

In the market Friday we had heavy shorting and then today we had a big short squeeze.   Sorry, no time tonight for charts.

Alan

Slow Melt Up Continues

Stock Market Technical Analysis Blog

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In the past two days we have seen very little change, just a slow creep higher in the indexes.  The comments I made in Tuesday's blog still all apply but I did add a new row of charts today in the  top row of the lower cluster above.  They are the Nasdaq, S&P, and VIX short term channels.  A little boring but we are still edging higher.

Trade well my friends,

Alan

VIX Lower & S&P Higher

Stock Market Technical Analysis Blog

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In the market today the VIX continued a little lower as the S&P hit another new five year high.  

• Looking at the upper cluster first we see that the VIX line pushdown we have been following for a week now is continuing to push lower allowing the S&P 500 to continue higher.
• Looking at the middle cluster with the thirty minute bar charts, we have a more focused view of the declining VIX and the corresponding rising of the S&P.

In the lower cluster of charts, there is a row of four Monthly bars charts: the XLF, S&P, Nasdaq, & QQQ with standard 5 and 10 EMA lines.  We can see how the XLF (large financials ETF) is leading the rally and then shortly after the S&P started its 5/10 lift, then after that the Nasdaq started its 5/10 EMA lift and right now the QQQ is just beginning its month 5/10 EMA lift.  

Directly below that there are quarterly bars chart of the XLF and a monthly bars chart of the Nasdaq (COMPQ), both of these have huge ascending wedge patterns. 

The XLF ascending wedge has already begun to move higher.  

The Nasdaq's ascending wedge is ready to start its lift which it should as the QQQ monthly 5/10 EMA lift starts gaining steam (shown right above it).

Putting this all together, the technicals on this market are pointing higher, possibly a lot higher throughout this year.

 Trade well my friends,

 Alan

VIX Continues Decline

Stock Market Technical Analysis Blog

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In the market today we had a slightly down day after hitting multi-year highs on Friday.  The VIX continued its line pushdown shown in the upper cluster, lower chart.  A more focused view is shown in the bottom chart of the lower cluster where we see it steadily downtrending.  Also, AAPL had another good day today.

Trade well my friends,

Alan

Sunday Night Focus: AAPL

Stock Market Technical Analysis Blog

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In tonight's blog I would like to focus on the developing situation in AAPL as it is in the early stages of a potential turn back up.  

• Chart 1 above - the monthly bars with a pair of standard small EMA lines shows that they are steadily constructing a gradual line bounce situation.  
• Chart 2 the weekly bars with a larger set of EMA lines shows they are also working a gradual line turn up on the weekly view.  
• Chart 3 shows the downtrend channel since AAPL's peak where a breakout is possible within a couple of days.  Also, we are seeing an ascending wedge lift that started a couple of days ago.
• Chart 4 - the long term trendline charts of AAPL shows that if AAPL breaks out of its downtrend channel in chart 3 it will immediately reenter its long term red ascension channel and also the larger blue slightly downhill channel.  

Historically, any time a stock breaks out of a sustained downhill channel and it's positioned where it can immediately enter one or even better two major channels above it right away, there is normally a huge run up in the stock triggered.  Granted they have to continue working the monthly and weekly line push ups shown in charts 1 and 2 but with the gradualness of the turn they are constructing in each pair, if they follow thru just a little more to break AAPL out of the chart 3 downhill channel they will likely have succeeded in a historical turning point for AAPL.  They still have a little more to go but it's getting close.

Trade well my friends, 

May the VIX be with you

Alan

S&P New 5 Year High, Nasdaq New 12 Year High

Stock Market Technical Analysis Blog

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In the market today we got the rally the VIX has been telling us was coming for the past three days, with the major indexes closing at multi-year highs.  Those who stayed focused on the VIX and ignored Wednesday night's Bear scare festival banked nicely today. 

Looking at the top cluster first, we see the break out above resistance of the S&P and the continued push down of the red EMA line in the VIX chart. (see this week's Wed and Thurs blogs)

In the middle cluster we see that the S&P broke out of its short term downhill channel today.

In the bottom chart we see the 15 year wide horizontal channel of the S&P with about 35 points to go to complete this up cycle.  Notice by the way, that once the S&P hits the upper channel line it historically trades sideways for about 6 months before the down cycle gets under way.  The powers that be, in back room Wall Street, have demonstrated over and over that they are vehemently determined to complete the up cycle the rest of the way to the upper channel line.  Today the S&P broke through resistance and it favors another attempt to reach the upper channel line.

Trade well my friends,

May the VIX be with you

Alan

Keep Watching the VIX

Stock Market Technical Analysis Blog

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In the market today we pretty much survived last night's fright fest where a number of leading technicians and market strategists all predicted a big market drop and one went so far as to imply a 1987 sized market crash was imminent.  They were partially successful in doing damage to the market as there was a flood of ma and pa investor sized sells processed right at the open causing the market to sell down for the first couple of hours but then reversed midday and traded back up to almost flat and the high of the day at the close.  

Friends, don't listen to them just watch the VIX.  When the red line crosses above the green line in the lower chart above, this is when the market starts selling.  If after the red line crosses above, it turns over and sets down on the green line and then pushes up from the green EMA then we have a hard sell-off starting.  Take a look at last night's blog and then tonight's, blog and you will see that the red is still being forced downward by the green which is a very bullish situation.  This is not where market sell-offs start and certainly not where 1987 sized market crashes start.

Just watch the VIX and mute the talking heads.

Alan

Watch the VIX

Stock Market Technical Analysis Blog

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In the market today we had a drop at the open and then climbed to flat by midday with a drop back down in the afternoon climbing back to flat at the close leaving the S&P pretty much the way it was as shown in the top chart above.  What's coming next in the market will happen because of the lower chart above, the VIX.  I realize that most every big name technician out there is predicting a big drop in the market any day now including renowned technician Doug Kass who is headlining CNBC.com tonight with a prediction that a major drop in the market is imminent.  

With so many technical leaders leaning the same direction it is easy for people to decide to go with the flow but I want to focus attention on the VIX tonight as it is starting to indicate something different.  In the two charts above I have applied the sentiment EMAs to the S&P and the VIX.  It can easily be seen that they pretty much rule these two indexes.  Looking closely at the last couple of days trading in the VIX we see that the smaller red line EMA is starting to be turned downward by the larger green EMA line.  If this downward curving pushdown continues through tomorrow we could be in full rally mode within a couple of days for another attempt at 1550 on the S&P which has been denied so far.  Making it simple, when the green line pushes the red line down on the VIX the market has a multi-day rally.  A downward curve is starting to show as of today. 

Alan

The First Blip

Stock Market Technical Analysis Blog

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In the market today we got our first blip and it was intense enough to probably wipe off all the fresh shorts that accumulated in the past few days.  Once they decide they are about done on a market push they normally shift into stage two where their primary objective is to mess with the shorts to create as much erratic havoc as possible.  Looking at the charts above, it's easy to see how simple it was for them to blip it up today but how hard it will be for them to do it again tomorrow.  

Alan

Pullback

Stock Market Technical Analysis Blog

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In the market today we had a substantial pullback.  This should be the top but be careful if you are going short, they can blip this thing back up really quick.  The blame for the drop was placed upon euro zone news which amazingly got back into the headlines today after mysteriously going away a few weeks ago when the rally began.  It's funny how that happens...

Alan

The Retail Investor Indicator

Stock Market Technical Analysis Blog

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In the market today we had a classic, summer style low volume Friday short squeeze to counteract some deterioration in the past few days in the indexes.  There have been lots of comments about how the retail investor has been pouring money into stock funds the past three weeks.  Historically this is a bearish indicator.  Looking at chart 3 above, in 2008 as the market was heading down to the 800 level retail investors were selling out of stocks in waves right before we hit the 800 level and now four years later they are buying into stocks huge as the S&P approaches the 1550 level, to put it simply most retail investors buy near the top and sell near the bottom and it's always been that way.  Something to think about...

Alan