Archive for the ‘The Week That Was’ Category
The Week That Was: 8/31-9/4/2009
September 5th, 2009 | 
Author: The DOW broke down out of the Bull Flag but did so on low volume and bounced up Thursday and Friday. After Labor Day we should see increased volume in the markets and a short term re-test of recent highs. September is historically a very bearish month so it will be interesting to see if we follow that historical pattern this year. I have my doubts. If the market decides it wants to go down, there should be plenty of time to see it coming and we can just join the move.
The SPX is also setting up for a short term retest of the top of the recent Flag. The index needs to push above that high on some volume. Should the index fail to break out, we could be in for some range bound trading in the short term. My sense for the direction is that we will challenge 1039. At that point we need to evaluate the strength of the move and assess its chances for further appreciation.
The COMPQ has been the leader in the move up from the March lows and will, in my opinion, continue that role. We have historical patterns that bode for a bearish move down in September, yet there are unique circumstances in that there are some fund managers that have not believed the credibility of the Bull Run and have not participated in the gains. Those institutional investors don’t want to be left in the train station and should drive the market higher into the end of the year with increased volume. In any event, we will just follow the big boys and profit.
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The Week That Was: 8/24-28/2009
The DOW formed a Bull Flag this week after breaking higher on last Friday’s session. The index has been moving in a sideways trading range for most of August. The immediate upside target is the high from Friday’s session at 9630. Then look for 9654, 9794 and 10365. Support resides at the low of the flag at 9459 then 9438 and 9117. We will just have to wait for the index to decide where it wants to go. If we get a break out of the flag with decent volume, that will be key.
The SPX is also in a flag pattern. The top of the flag at 1039 is the first upside target with 1044, 1106 and 1134 the next on the radar to the north. Support is at the bottom of the flag at 1016-1018 and then the swing lows from 8/17 at 978 and 7/29 at 968. I’m waiting for a break. Don’t guess, just follow it and hop on board.
The COMPQ attempted to break out of the flag on Friday, but was beaten back into the consolidation. The first upside target is Friday’s high at 2059 then 2070 and 2211. Support resides at the low of the flag at 1993 then 1962-9. The entire gap from 8/14 – 8/17 at 1969 – 1949 will act as good support. Finally, the swing low at 1930 should provide significant support.
I am still bullish until the market tells me otherwise. There are many that have tried to short this market too prematurely and gotten hurt by doing so. Let the market tell you what to do. You don’t have to get the first part of the move. When a correction happens you will know when to optimize the turn. I am currently delta neutral and selling premium. When the market breaks from its current consolidation then I will adjust and profit from the directional move.
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The Week That Was: 8/17-21/2009
As mentioned in last weeks blog, I felt that the DOW was likely to continue its climb and it has done exactly that after a brief two day pullback. The next stop on the trainride to the north country is 9654, 9794 and 10365. Look for 9117 to provide immediate support then 9088 and 8878. I see the index continuing to move higher. Watch for key areas of support and resistance and observe how the index reacts to those levels.
The SPX is also likely to continue the move higher. The next resistance level is 1044 and 1106. 978 and 956 should provide support.
The COMPQ will look for 2070 and 2211 as the next area of resistance. Support should be located at 1930 and 1905.
I am currently on the road, so the analysis this week is very brief. I will go into more detail upon my return early next week. As such, you will not find the charts as normally provided. Thank you for your understanding. Best, Robin
The Week That Was: 8/10-14/2009
The DOW is in a trading range between 9200- 9438. Volume has been decreasing, so there is indecision and lack of conviction. Some technical analysts are calling for a substantial pullback. From a fundamental perspective it seems that the market should be succumbing to the headwinds. However, I believe the market will have pullbacks which is a healthy process, but nothing approaching the bearish move that some project. For the short term, I see a continued climb. With that said, I will follow the market and if it should decide to correct, I will be on board for the move. Look for key support and resistance levels and assess how the market is reacting to those levels and you will have your answer as to the direction. Don’t fight it, just go with it.
The SPX is the same story as the DOW. There will be opportunity to catch a nice move out of this consolidation. The trading range is currently 992-1018. Look for volume on the breakout/breakdown and go with the move. Don’t try to guess the direction but rather, let the index tell you what it is going to do and hop on board for the ride.
The COMPQ has been the leader in the recent bull run. There is no reason to believe that will change. Look for the technology laden index to make the first move and lead the way out of this stagnant environment. The current trading range is 1962-2016. Watch these levels closely and be aware of a breakout/breakdown and play it accordingly. Volume will be your key indicator to watch in order to ascertain the credibility of the break.
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The Week That Was: 8/3-7/2009
The DOW continued its trek up, closing higher week over week by 198 points. The ascent has flattened and we could be forming a rounded top. Fridays’ action pulled back into the sideways trend that has been evident for the past four trading days. Volume has been unremarkable. Support resides at 9088, 9007, 8878, 8221 and 8087. Look for upside targets at 9654 and 9794.
My upside projection from last weeks’ blog for the SPX was 1007 and we settled at 1010 at the bell on Friday. There was a confluence of indicators with a fibonacci level and a swing high from 11/4/2008 that is forming resistance. We are currently overbought and looking for a pullback soon. I don’t believe it will be severe, but more of a general “shake out” before resuming higher. Support is at 992, 969, 956, 944, 930 and 869. The next upside target is 1044.
The COMPQ is currently in a Bull Flag and looks as though it wants to roll over. If the index breaks below the low of this past Thursday, and it does it on volume, we may begin a more significant pullback. RSI, Stochastics and MACD are all looking toppy. Stay nimble and follow the market.
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The Week That Was: 7/27-31/2009
The Market has been quite resilient and I am not ready so say that the run is over even though it is showing signs of slowing. The DOW broke out of the Bull Flag on Thursday only to retrace at the close. Friday saw a similar story as the Index rejected higher price levels. Volume picked up on both of those days confirming that buyers are not participating in driving the price higher. However, I’m long until I’m not. I will need to see a definitive break to the downside before I change my outlook. It is time to be a bit more cautious about the continuing upside until the Market decides what it wants to do. Support resides at 9088 and 8878. If the DOW hits those levels, I would make sure that my portfolio was delta neutral. The critical level where I would change the directionality of my portfolio would be 8000.
The SPX is the same story as the DOW. Higher price levels were rejected late in the week. The Index will probably move back into the recent flag. If the SPX breaks down through the lower side of the flag at 966 on volume then that may be a sign that we are rolling over. If that happens, look for 956 and 944 as downside targets. The upside target remains at 1007.
The COMPQ formed Shooting Star candlesticks on both Thursday and Friday. That is a strong indication that upside momentum has begun to subside. The question one must ask is the question many have been asking since early March, “Is this the beginning of a reversal? The key to knowing whether it is merely a short term pullback or something more substantial is by watching how the Index reacts at predefined levels of support and whether there is participation in the move as reflected by volume. I suppose that we will move back into the recent flag. If we break through the lower side of the flag at 1938, then look for the COMPQ to retest 1905 and then 1880. The upside targets are 2070 and 2319.
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The Week That Was: 7/20-24/2009
In last week’s blog, I suggested that that the DOW could move up to 9088. We finished 5 points higher than my projection at 9093. The market has shown incredible resilience as the bulls refuse to relinquish momentum. Support resides at 9088 and 8878 with the upside target at 9654. There is nothing to suggest that the bullish move is over. I have been long since early March and will remain so until the Market tells me otherwise.
The SPX finished the week at 979, above the 944 and 956 targets from last week, but short of 1007. We will likely continue to challenge 1007 and then 1044. The index looks strong and should continue its ascent. Support resides at 956 and 944.
The COMPQ closed lower on Friday essentially due to poor earnings from MSFT and AMZN. The index pulled nicely off of its lows to close right at it highs for the day. I suspect that the lower close is to be expected after over two straight weeks of gains. I view this as nothing more than a buying opportunity as the index continues its trek higher. There is support at 1947 and 1880and the upside target is 1984 and 2070.
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