Stock Market Technical Analysis Blog
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In the stock market today we finally saw exhaustion of the 10-day PPT drive. The NASDAQ sold down to its gold Day 5 EMA line and was vigorously defended into the bell. The TLT chart shows that it also returned back up to is gold Day 5 EMA line and went a little further above it. For the NASDAQ the gold 5 EMA line is the token bounce point if they intend to take the market higher on this push, however, the bond market doesn't think it will happen as they crossed above their 5 EMA.
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In the charts above, the NASDAQ lost its brown line channel midmorning and dropped to its critical red trendline where it held on to it into the bell. Inversely the bonds got up to their critical red trendline and held right at it into the bell also. Both sides will not get an upward agenda tomorrow, one will be forced to drop and it may be quick.
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In the above charts the NASDAQ failed to break up out of its main uphill blue line channel and sold down out of its pink line channel as did the SPY and DOW. The NASDAQ is still high in its blue channel but today's selling caused the SPY and DOW to lose their blue line channels which is really negative for tomorrow unless we have another intervention.
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In the above charts the UUP, TLT, and VIX all acted inversely today of the previous charts by breaking up out of their pink line channels, threatening to return to their large orange line channels.
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In the above charts the QQQ which has been the lead pony in this 10-day run was pushed down by its upper blue channel line causing it to lose its attempt to regain its steep red line channel. The SPY sold back down into its black line horizontal multi-month channel and the VIX popped back up into its black line multi-month channel. The VIX looks poised for a multi-day run back up to the 43 level but note that the QQQ has still not dropped back down into its multi-month black line channel. If and when that happens the stock market shorts and the bond buyers will have to be careful as that would be a sly place for the PPT to bounce the market back up since that black line and the green center line of its blue line channel will coincide sometime during the day tomorrow.
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In the above chart set the lower Advance Decline chart shows that we are well below the green buy area for the stock market. The upper chart shows that we also have support of the lower brown line downhill channel they are currently working.
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The chart set above is the most important this evening. In the NASDAQ today's trading bar opened still inside of the downhill red channel that it popped up into Friday but as the day wore on it sold back down out of it and closed at exactly the lower line of its 5-month wide horizontal black line channel. This is a really volatile pivot point that could go quickly in either direction tomorrow. Below the NASDAQ chart we see that the S&P and DOW both closed exactly on the lower line of their 10-week uphill blue line channels which is also a volatile pivot point for tomorrow's open. At the top right, the TLT closed today exactly on its month-wide horizontal blue channel line still another very volatile pivot that could go either way at tomorrow's open. The last two charts, UUP & VIX, are the two that weigh heavily on traders minds. The UUP broke up out of its 10-day downhill channel then climbed to close at its high of the day. The VIX (which dropped down out of its 10-week horizontal channel on Friday creating bullishness in the market) opened today back up on the red line and climbed well back into the red channel and closed at its high of the day. These two together are signalling that the stock market will trade lower for several days unless we have another intervention.
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The above chart shows that the red/green and red/blue moving average bounce setups on the quarterly and monthly bar charts are still intact but a multi day selloff could put the end of year rally in jeopardy.
If they turn the music back on tomorrow morning it won't be a minute too soon as any bearish movement in any of the charts in set #7 tomorrow will create bearish situations quickly.
Alan
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