Stock Market Viewpoint

Stock Market Viewpoint
Reading the Tea Leaves...

Monday, October 27, 2014

Closing Charts

Stock Market Technical Analysis

click on image to enlarge

In the market today we saw day two of a powerful tractor program that they have clamped down on the SPY  & QQQ to keep the S&P and the Nasdaq in a tight slightly uphill range.  You can see the tiny channel that is drawn with pink lines in the lower chart cluster on the past two days of trading in the S&P and NASDAQ.  

In my midday blog today I discussed in detail each of these charts and nothing has changed with the closing print of these charts except for one thing that happened in the last thirty minutes of trading. Look at the VXX in the bottom right corner of the lowest cluster and you can see that it dropped out of its blue channel about twenty-five minutes before the close.  This could be the first sign that the bears may be the first to blink in this standoff.  My thoughts are that the bears are weary of these tight range tractor programs that are put on the market to control it when market conditions are critical. After seeing the tractor program complete two days of tight containment successfully, many of the shorts may begin to feel that even if Yellen turns off QE Wednesday instead of doing an extension that they may have their tractor programs locked so tight on the market that it won't drop regardless of the selling pressure.  These tractor programs are that strong and if traders see that stocks are not dropping in light of such a negative event then it follows that a short squeeze would be very easy to get started.

We will see...

Trade well my friends


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