Stock Market Technical Analysis
click on image to enlarge
Thursday in the stock market was yet another extreme whipsaw reversal. Early afternoon, however, the VIX broke up through its 17.62 resistance level while the S&P managed to hold at its 1928 support level at the close as can be seen in the two charts above. In a truly free market environment this activity would be more conducive to a coming drop in the market rather than a breakout higher but with Team Yellen (Yellen's plunge protection team) aggressively buying the SPY and QQQ at strategic points in the technical analysis, anything is possible.
The reason the market is behaving so erratically right now is because of the bull/bear battle taking place at a historical VXX pivot while at the same time, the battle is being fought at the same EMA juncture of the S&P, both shown in the charts above. The two smaller charts on the right zoom in on the junctures. Looking closely at these charts, the red line of the VXX is as close to up crossing as it has been in the past few days but each time it gets to that point they jam the market to undo it. I discussed these junctures in detail in my last three evening posts.
Today's market action was very bearish, just as soon as the short squeeze stopped there were no buyers at all to take new positions. The bears saw this immediately and took the S&P all the way back down to the 1928 level where it closed. Such a total give-back day seems to give the bears a little bit of an advantage in the battle to see who can cause the pivot to break in their favor. However, Friday is "float up Friday" which favors the bulls and the closing Advance Decline was -5350, the third lowest close this year, which also favors the bulls. Additionally, very rarely does a major market event happen on Fridays to the upside or downside. Mondays, however, have a long history of radical stock market moves especially extreme gap ups or gap downs.
Trade well my friends