Breakout

Click on chart at left to enlarge.

The market finally broke out of the bull flag with conviction on XMAS eve. Next stop is probably 1150 - 1160.

Note the inverted head and shoulders pattern on the stochastics. Both fast and slow stochastic lines are above 80 and the bullish cross is confirmed by the MACD. Additionally, the stochastics never reached below 20. SPX, DJX, COMP, and RUT closed at the highs of the week. We are going higher. Our site is http://www.tradingparadise.com/ we do free premarket, trading

hours, evening shows. Check us out.

Zone of Support Holds

Click on the chart at the left to enlarge.

After closing at yesterday's lows, today, the market pushed down into the zone of support where it hit the ascending trendline passing through the July and November lows. Additionally, the low of the day fell to less than 13% above the 200 day simple period moving average. This level above the 200 day SMA has been an area where bulls have came in all Fall. Scroll through my previous blogs to see a great chart on this.

The stochastics and the MACD remain bearish, but today's candle is bullish. We are still in a non-trending market. The weekly chart is bullish.

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Trending Bearish Day

Click on chart at left to enlarge.

We filled the December 9th gap as the bears were in control throughout the day. We are about to enter a critical zone of support, which is highlighted by the yellow box on the chart. The technicals turned decidely bearish and we have validated yesterday's potential reversal candle.

The last 3 times we closed at the lows of the day are as follows:

1. 10/28: the next day's trade was bullish engulfing

2. 10/21: the next day's trade was a bullish hammer

3. 10/1: the next day's trade was a hammer off the 50 day SMA

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No Change

No change from yesterday.

Lost power today....bummer.

Technicals still not Confirming

After closing higher 4 days in a row, the market got the needed rest today. The low of the day was support from the 8 day EMA. Bulls still need a positive MACD cross to confirm the latest stochastic cross. Additionally, the bulls are welcoming the rising 50 day SMA and expect it to come into play in the next 2 to 5 days. The bears are hoping for several selling days o see if the market can successfully retest the 11/27 low.

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Like I said last night, we are going higher

Click on the chart at left to enlarge.

The Dow Industrials, Transports, NASDAQ, and the SPX all closed at rally highs. Although the SPX has not confirmed this move with its MACD, the NASDAQ and Transports have confirmed. We are going higher and I think 1155 is the next target. Take note that the SPX has closed higher the last four trading days. I think the Russell make take the lead tomorrow.

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Bullish Stochastic Cross

Click on the Chart at left to enlarge. This one is very informative!

We had the bullish stochastic cross today. Although the MACD histogram is not yet at previous reversal levels, the fast and slow lines are coming together.

If we retest the 11/27 (day after Thanksgiving) lows successfully, we will be in that 12%-13% area above the 200 day simple moving average that has previously propelled us to new highs. We could go as high as 1150 and still be 20% above today's 200 day simple moving average. This is significant because throughout this Fall, the market has been content with a rising market as long as it doesn't get more than 20% above the 200 day simple moving average.

We nailed AA and several other Dow breakouts this week. AA Dec 15 calls paid over 850% today! If that's the kind of action you are looking for, consider joining our team.

We do live pre-market, trading hours, and evening trading shows. Become a free member and get your password at www.tradingparadise.com