Stock Market Viewpoint

Stock Market Viewpoint
Reading the Tea Leaves...

Tuesday, October 28, 2014

Bears Blink, Bulls Charge

Stock Market Technical Analysis

click on image to enlarge

Following up from my blog last night where I discussed how the drop in the VXX right before the close Monday might be a sign the bears were about to blink in the big EMA standoff, with the new trading day we see that is exactly what happened.  Looking at the top chart cluster we see that the S&P has begun to lift in its EMA setup and the VXX had its price drop below the pair of lines this morning, a precursor to setup failure.  In the lower charts above, the SPY has reentered its two year bubble channel this morning and the ADX shows that the buyers came in fast.

In charts 1 and 2 above we see that the S&P and NASDAQ both broke above their 50 day SMA lines this morning.  In the small weekly candles chart inlaid on chart 5, the S&P broke above the weekly center basis line of the Bollinger bands.  In the bottom chart we see how the VXX fell out of its uphill channel this morning.

In the short term channels cluster above, we see both the VIX and VXX dropped well out of their blue channels.  The NASDAQ actually broke out of its multi-month downhill channel.

The VXX drop yesterday before the bell was all the warning that was given that the standoff was about to break.  If you acted quickly on it you have already made good money going long.

Trade well my friends


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