Stock Market Technical Analysis Blog
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In the stock market today the slow creeping movement caused by ongoing propping gave another day of pretty much stagnant action in most stocks. I mentioned in my blog last night that after seeing the relentless propping going on yesterday and even though we had a down cross on the S&P 30 minute chart no one should be surprised if they came in this morning and twisted the down cross back up to morph it into an up cross which is what they did as shown in the top chart above.
Another notable item tonight in the lower chart above, thirty minute chart of AAPL, we see that with today's close we are reaching the completion of a five day wide rising wedge pattern which 90% of the time is followed by a sudden drop in the stock.
Whether Bernanke's PPT can stop this from happening will have to be seen. Considering the fact that Bernanke came out and spoke the words that one of the primary purpose of QE3 is to push the stock market higher, a whole new meaning to the "don't fight the Fed" phrase is upon us. It could be a double edged sword though in that if they do push the stock market higher to help the economy actually then having actually voiced their intentions may be looked back upon as a superb move but if the market ends up being too heavy to push higher at this point then Bernanke's credibility could come into question as people might look at it and realize that if the Fed can't push the market higher it may have to go lower. Nonetheless, the world of professional traders realize that as of last Thursday's QE3 announcement we have entered a new era of transparency for the Fed whereas in the previous FOMC meetings Bernanke has insisted that they don't pay any attention to the stock market and now they are trying to make as many as possible aware that they are targeting the stock market to take it higher.
Keeping the market sideways has helped keep the shorts away but the longer it stays here the more short positions will be taken and the heavier the market will get. At that point if they still can, one might expect a huge gap up and a wicked squeeze through the morning with whatever reason they might find to cut and paste on it. If AAPL starts to break down all bets will be off as most traders will not feel like Beranke's team can keep pushing the market higher when AAPL is falling. AAPL is just too big a part of the indexes.
In addition, there are thousands of automated trading programs that will recognize AAPL's rising wedge and have huge short positions preloaded with a tight trigger ready if AAPL starts to move down at the open tomorrow.
Stepping back to look at the overall view of the market there are two clusters below that show the big picture charts on the market, each one pretty much self explanatory. The three charts with the red lettered name box (VIX, UUP, TLT) trade inversely to the stock market. It's noteworthy that all three of these have reached their bottom channel line and are starting to rise which normally happens at stock market tops but as of last Thursday the previous realm of what's normal has been changed and it will take a while for traders and investors to learn what the new normal will be as we begin this new era of more transparent Fed action.
Alan
Another notable item tonight in the lower chart above, thirty minute chart of AAPL, we see that with today's close we are reaching the completion of a five day wide rising wedge pattern which 90% of the time is followed by a sudden drop in the stock.
Whether Bernanke's PPT can stop this from happening will have to be seen. Considering the fact that Bernanke came out and spoke the words that one of the primary purpose of QE3 is to push the stock market higher, a whole new meaning to the "don't fight the Fed" phrase is upon us. It could be a double edged sword though in that if they do push the stock market higher to help the economy actually then having actually voiced their intentions may be looked back upon as a superb move but if the market ends up being too heavy to push higher at this point then Bernanke's credibility could come into question as people might look at it and realize that if the Fed can't push the market higher it may have to go lower. Nonetheless, the world of professional traders realize that as of last Thursday's QE3 announcement we have entered a new era of transparency for the Fed whereas in the previous FOMC meetings Bernanke has insisted that they don't pay any attention to the stock market and now they are trying to make as many as possible aware that they are targeting the stock market to take it higher.
Keeping the market sideways has helped keep the shorts away but the longer it stays here the more short positions will be taken and the heavier the market will get. At that point if they still can, one might expect a huge gap up and a wicked squeeze through the morning with whatever reason they might find to cut and paste on it. If AAPL starts to break down all bets will be off as most traders will not feel like Beranke's team can keep pushing the market higher when AAPL is falling. AAPL is just too big a part of the indexes.
In addition, there are thousands of automated trading programs that will recognize AAPL's rising wedge and have huge short positions preloaded with a tight trigger ready if AAPL starts to move down at the open tomorrow.
Stepping back to look at the overall view of the market there are two clusters below that show the big picture charts on the market, each one pretty much self explanatory. The three charts with the red lettered name box (VIX, UUP, TLT) trade inversely to the stock market. It's noteworthy that all three of these have reached their bottom channel line and are starting to rise which normally happens at stock market tops but as of last Thursday the previous realm of what's normal has been changed and it will take a while for traders and investors to learn what the new normal will be as we begin this new era of more transparent Fed action.
Alan
Click on image to enlarge
Click on image to enlarge
