Stock Market Technical Analysis Blog
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In the market today we had a slight down day as the fed continues to work behind the curtain to turn the market upward. In the six market indexes, charts 1-6, we see that the lower line of the short term channels are still holding the market as the Fed continues to try to turn the market upward by having the smaller red EMA line start bouncing up from the larger green line instead of piercing down thru the green on all the indexes which would cause a fierce sell off. The S&P, Dow, Russell 2000, and XLF all have their red/green EMA lines merged ready for a big break either up or down. Note that the Nasdaq & QQQ are about one to two days behind the other four. These last two should make contact tomorrow and the full merge happen Friday morning, assuming the market is at least sideways tomorrow and opens at least flat on Friday. Once all six have their EMA pairs merged, a tremendous move will follow quickly depending on whether the red bounces from the green or pierces thru.
The charts at the far right are the VIX and VXX volatility indexes and below that the TLT bond index. The VIX is still being contained by its channel while the VXX is still moving up. Realize however, that the VXX is the futures trading entity for the VIX and often gets overdone in both directions. The most interesting chart of the group is the TLT because it shows that the bond traders are quickly exiting their positions for the past two days anticipating the Fed will succeed in their effort to turn the market upward which would cause the bonds to dive. Historically, the pro bond traders get it right far more often than pro stock traders.
While the market is still vulnerable for the next two days even if the red EMA starts to turn upward by Friday afternoon it does look like the Fed is still in control and could possibly be holding the S&P, DOW, and Russell 2000 where they are until the Nasdaq & QQQ complete their merge either late tomorrow or Friday. Once that is done buckle your seat belts, the market is staged to breakout of a powerful pivot point leaving either the bulls or the bears very unhappy.
Trade well my friends