Stock Market Technical Analysis
Click on above image to enlarge
First a few comments on the broad market, the markets continued their euro scare sell off through the morning today causing the red 5 EMA line to pierce down through the black 200 on the S&P 500 and NASDAQ charts shown on the left side, top and middle charts. Shortly after mid-day there was a fierce push to rescue this and they drove the S&P and the Nasdaq all the way back up causing the tips of the red 5 EMA lines on the S&P and Nasdaq to return to their sideways bounce position as the chart now shows as of closing. The reason for the eleventh hour push can be seen in the bottom chart on the left, the 60 minute bars chart of the UUP (Dollar Index). Looking at its third bar back where the UUP hit resistance at the upper blue channel line was where the push began and its chart shows how the jam effort on the indexes pulled sellers into the UUP quickly. In the last hour the institutional selling of the UUP was relentless. We now have the S&P and the Nasdaq with a 5/200 bounce layup that is four bars wide, threatening a good move upward. The whole picture would have been a little bit safer and conclusive if the UUP has actually fallen out of the red channel, instead it closed right at it at 22.70. Nonetheless, with even the slightest market push up at the open the UUP should fall out of that channel and begin the path down to the lower blue line over the next 2-3 days. Granted this is certainly not a done deal by any means and any bad euro zone news will reverse everything in a heartbeat. As of today's closing though we might well be beginning a nice lift in the market.
To further reinforce a bullish view of the markets we need to additionally consider where AAPL is at in its chart. We all know that the market will not go anywhere without AAPL at least going along also, if not, taking the lead. The three right side charts from top to bottom are the 120min, day, and week bars of AAPL. In the bottom right corner chart, the weekly of AAPL, we see a 5/10 bounce and in addition it has price bar support from the blue 20 line. In the middle chart on the right, daily of AAPL, you can that yesterday's bar opened above the blue 20 and pink 50 EMA lines but quickly lost it and sold well below both. Today's bar crossed back above the 20 and 50 and closed above both, a very bullish setup. In the top right chart, 120min of AAPL, we see how yesterday it regained the red channel but lost it and today it closed well up in it. This is classic textbook layup setup for a nice bounce move on the backside of AAPL's peak. If they can sufficiently muzzle the release of any bad euro zone news tomorrow and Friday, AAPL could easily build enough steam for a run back to 600.
All in all, everything is looking positive but realize if the UUP in the bottom left corner chart does not drop out of that red channel in the morning for whatever reason, traders who went in today will exit quickly. Also if we have any bad euro zone news make its way to the news wires this market will hand your head back to you in a basket within minutes.
Alan
To further reinforce a bullish view of the markets we need to additionally consider where AAPL is at in its chart. We all know that the market will not go anywhere without AAPL at least going along also, if not, taking the lead. The three right side charts from top to bottom are the 120min, day, and week bars of AAPL. In the bottom right corner chart, the weekly of AAPL, we see a 5/10 bounce and in addition it has price bar support from the blue 20 line. In the middle chart on the right, daily of AAPL, you can that yesterday's bar opened above the blue 20 and pink 50 EMA lines but quickly lost it and sold well below both. Today's bar crossed back above the 20 and 50 and closed above both, a very bullish setup. In the top right chart, 120min of AAPL, we see how yesterday it regained the red channel but lost it and today it closed well up in it. This is classic textbook layup setup for a nice bounce move on the backside of AAPL's peak. If they can sufficiently muzzle the release of any bad euro zone news tomorrow and Friday, AAPL could easily build enough steam for a run back to 600.
All in all, everything is looking positive but realize if the UUP in the bottom left corner chart does not drop out of that red channel in the morning for whatever reason, traders who went in today will exit quickly. Also if we have any bad euro zone news make its way to the news wires this market will hand your head back to you in a basket within minutes.
Alan
