Technicals continue to Weaken

Click on chart at left to enlarge.

I have boxed in the double top along with its neckline. It is currently a bullish flag as long as we trade inside the box. If we fail to break above the box, we will trend towards a retest of the 50 day simple moving average. The stochastics and the MACD suggest future weakness.

Bullish Support from Resistance

The bulls showed up this morning with a gap up open and for awhile threatened last Monday's high. Resistance is at the 11/16/high of 1113.69 and support is at today's low of 1094.86. The early October highs acted as support.

The moving averages are ascending, the stochastics are still bullish, and the MACD fast line turned to the north.

The weekly stochastics have turned decidedly bullish.

Need to retest support

Click the chart at left to enlarge.


I think the market needs to test support and a 38% fibo at 1080 - 1081 before going higher. The fast schochastic line is pulling down yet above 80 which is inconclusive. More importantly the fast MACD line is moving south from a lower high.

The weekly candle (weekly chart not shown) is a potential bearish reversal candle.

See the live shows by becoming a member:
http://www.tradingparadise.com/

Uptrend needed a breather

Click on the chart at the left to see details.

The market is not ready to thrush up to the top of the channel. The fast line on the MACD is closing in on the slow line. As long as the fast line is descending we will pull back.

Flagging

Two day range has been between 1102 and 1111. The pattern is a flag and we have closed near the top of the range the last two days. Moving averages are beginning to catch up with the price action and the stochastics are embedded above 80.

Support and resistance are noted on the chart...click to enlarge.

We Are Going Higher

The 1101.97 area worked as support today...meaning old resistance is acting as new support. We closed above yesterday's close and appear to be flagging at the 1110 level. This is now an ascending channel trade with the top of the channel acting as the next resistance level.

The candle is bullish and the technicals support futher upside.

New Rally High and Rally High Close

Click chart at the left to enlarge.

The Cup and Handle off of the 8 day EMA worked giving us a solid break above the 1,100 area. Stochastics remain embedded above 80 and weekly stochastics (not shown) take a sharp move to the bullish 80 area.

Even the mega-bear, Merrideth Whitney, could do little more than cause a pullback to R-2 for 30 minutes.

Target to the upside is the top of the drawn channel or 1,120; whichever comes first. Support is at 1,105 followed by 1,101.

The candle represents normal buying and is bullish.

Bull Case Bear Case laid out

Bear Case:

Double top at a round number, 1100. Currently trading too far above the 200 day simple moving average. I discuss this in more detail on the market wrap video for 11/13/09 on my home page, www.tradingparadise.com . Additionally the NASDAQ is putting in a text book Head and Shoulders Pattern.


Bull Case:

The market is putting in higher highs and higher lows; the definition of an uptrend. The market is trading above all moving averages and they are ascending. The market has key support levels under it at 1066 - 1080.

Market sees a double top

Click on the image at left to enlarge.

A few things are working against the bulls.

1. 1100 is a round number and many traders will take profits at round numbers.

2. Although we briefly put in a new high, the overall appearance is a double top.

3. Yesterday's candle was a spinning top and was validated as a reversal candle by today's trading.

The market is reluctant to push higher any further from its 200 day simple moving average. I expect a pull back short term to the 1076 - 1080 area. We could even go as low as 1040 and still be bullish as it would be a higher low.

New Rally High

Bulls put in a new rally high and closing high today. I think we need to go a couple points higher to avoid the appearance of a double top.

The stochastics on the daily got above 80 and they are "kissing" at 73 on the weekly.

The day's candle was a spinning top which could be a reversal candle if validated by tomorrow's trading.

Tomorrow's economic data is jobless claims and I have felt this will have the biggest impact on the markets this week. Walmart releases earnings before the open and Disney reeases after the close tomorrow.

Indecision Day

The maket pushed up to some old daily candle highs and then pulled back. While we did not reach 1,100 the market seemed bullish in light of the big recent push up from 1,029.

On chop days I prefer to take profits faster with larger positions.

Wednesday may be a chop day also as the market awaits Thurday's initial and continuing jobless claims numbers.

Become a free member and see our live trading shows at

www.tradingparadise.com

Bulls want another shot at the title

The bulls eliminated the potential head and shoulders pattern by trading above 1081 with conviction. The SPY's gapped up at the open and continued higher all day, closing near R-4.

The bears will have to hope for a double top but cannot be too encouraged because the Dow pushed well above the double top area and closed at new rally highs. The QQQQ's and IWM's may hit a roadblock at triple top areas. If this coincdes with the S&P 500 hitting the double top area, the bulls may be forced to take a rest.

To see the live real time trading shows, go to http://www.tradingparadise.com/

Very close to serious Resistance

Click on the chart at the left to enlarge.

The bulls are back in control but are very close to serious resistance. Several fibonacci's converge at the 1073 area.

If we cannot clear the 1073 - 1081 area, then we will have a head and shoulders pattern forming. If we can get above 1081 but not move on up to new rally highs, then the pattern will be a double top.

Daily stochastics are moving up while weekly stochastics are moving down. Next week should be very telling.

To join our team and see the premarket, trading hours, and evening shows, go to www.tradingparadise.com

Time for candle addition

Click on the chart at the left to enlarge. Add together all of this weeks candles and we have bullish engulfing next to Friday's monster red candle.

The unemployment report comes out tomorrow pre-market; glad I am in cash going into that. I think the reason we did not bust out of the ascending triangle intraday today was trader reluctance to load up on long positions before this report. If we can clear 1066.50 (last Thursday's high) next resistance is 1072. Support is at 1030.

See the live shows at www.tradingparadise.com

Bears back in control

What a day! A gap up open, an intraday double top, and a crash that filled the gap. What more could a trader want?

The day's high was rejected at the 21 day exponential moving average, which is bearish. The daily candle was a gravestone doji, which is bearish. Friday's monster red candle has not been invalidated. A new descending trendline has been established. Click on the chart at the left to see this in detail. I think we re-test the 1030 area again and still hold to my target of 1012 - 1020. I can see 985 further out as a longer term downside target.

Go to www.tradingparadise.com and become a free member to see our live trading shows.

Friday's Low Holds

Click on Chart to Enlarge.

The SPX traded above both Friday's low and Monday's low. The trading action was choppy as traders look to tomorrow's FOMC rate decision. Today"s trading was engulfed by Monday's candle.

To see the video versions of this in real time, go to www.tradingparadise.com and become a free member.

We are the only site that does Pre-Market, Trading Hours, and Evening Shows.

Indecisive Spinning Top

The daily candle had a 2.25% range but ended in an indecisive spinning top. The high of the day was rejected at the 50 day simple moving average; which is bearish. The low of the day traded below Friday's low; which is also bearish.

I still have to stick with downside target area of 1012 - 1020.

Go to www.tradingparadise.com and become a free member to see the video postings.