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.

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Moving Averages bullish, Technicals bearish

Click on chart at left to enlarge.

No change from yesterday. Yesterday's and today's candles are opposing hammers which represents indecisiveness. We are 15% abov the 200 day SMA.

But our room kicked it...we had great plays on AMZN, ICE, GS and others.

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Potential Reversal Candle

Not much of a change from yesterday because we did not hit either a key support or resistance level. We did put in a potential reversal candle.

Tracking how high we remain above the 200 day simple moving average. Click on chart at left to enlarge.

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Expecting a Narrowing the gap with the 200 day sma

We finally got that close below 1092. If we push down to 1083.74 we may get a small bounce. A break of this level will take us to 1074.77.

Stochastics reamin bearish and MACD histogram is not yet at recent oversold levels.

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We are not Trending

Moving averages are bullish. Technicals are bearish. I do not expect anything big to happen unless we close above 1112.28 or below 1096.52.

Bear still have hopes for a gap fill at 1070 from November 6, 2009

Cannot close above 1,110

Click on the chart at the left to enlarge. I have a few important levels noted. The technical are getting soft. We did not validate last weeks potential reversal candle on a weekly chart (not shown). The biggest problem is that we are still trading at over 16% above the 200 day simple moving average and until this gap closes, I find it hard to believe we can just power higher.

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Close at top of Tuesday's Gap

No one wanted to hold any positions going into tomorrow's unemployment report. We closed at the top of the gap formed on Tuesday. The flag pattern is still intact but we have validated yesterday's doji as a reversal candle. On the weekly chart, last week's low has not been breached.

Just Waiting for the MACD Cross

We should push higher as the daily stochastics gave us the bullish cross. The only thing left in doubt is the interaction between the fast and slow lines of the MACD.

The 8 day EMA will act as support.

Top of the Flag again

Click on the chart to enlarge.

We have been trading within a box for nearly three weeks. The box has formed a flag off of the run up from the 11/2 low.

Tomorrow look for the MACD fast line to hit the MACD slow line and watch for fast and slow stochastic lines to come together.

A push above the box will give an initial target of 1120. A break below thebox will find support at the 50 day simple moving average.