Good morning. Happy Friday.
The Asian/Pacific markets closed mostly down. Only South Korea (up 1.8%) moved more than 1%. Europe is currently up across the board. Germany and Norway are up more than 2%. Belgium, France, Amsterdam, Stockholm and London are up more than 1%. Futures here in the States point towards a relatively big gap up open for the cash market.
Even though the market has been up and down this week, I’ve stuck to my guns with my bias. Here’s the daily S&P 500. In my opinion it’s trading in a little flag pattern within a mini uptrend, and this is all taking place within a range that has lasted approx. 11 weeks.
Just because the market goes down (as it did on Monday and Wednesday) doesn’t mean I’m going to panic and immediately shift to the other side. It pays to back up and see the bigger picture. The S&P had rallied 150 points in two weeks. Was I supposed to change my bias after Monday’s weak day? I don’t think so.
We’re going to get some news out of Europe this weekend, so make sure you recognize the risk holding over the weekend. I’m not suggesting you completely go to cash, just that you may want to lighten up. Europe is, after all, the major road block going forward. Another thing on my mind. Options expire today. The market has moved perfectly this week to cause lots of pain. Namely it held up to expire lots of put options worthless. What happens on Monday when the invisible hand is no longer in play? We’ll see. It’s another reason to be a little conservative here until we see what happens early next week.
Barring a big sell-off today, my bias will remain to the upside heading into next week, and the first couple days of next week should be very telling.
headlines at Yahoo Finance
today’s upgrades/downgrades
this week’s Earnings
this week’s Economic Numbers
0 thoughts on “Before the Open (Oct 21)”
Leave a Reply
You must be logged in to post a comment.
Jason is right on. The bias is push to the upside to end the year on a rally. It is dubious to say the least. Elliott Wave Internationals EU edition sees Wave c of Wave C, and down to the old lows before a ripping rally. Exciting, but also dubious.
The market globally is in a muddle. The fears over China’s slowing of its economy is raising hell with commodities markets and that is pressuring the old drivers. GE did its usual magic stunt on the numbers today. That is stability, or is it?
I am conservation with risk off, hold 1% in bonds, and going to watch football, no backetball and I am long the Rangers.
whidbey – I don’t subscribe to Elliott Wave International but I do see the move from SPX 1191 on TUES as dubious in that this breakout attempt above the 200 day EMA at 1234 may be a fake out. The hourly chart since the 1198 low yesterday has my interest from my EW perspective. Perhaps I’m displaying a bearish bias rather than objectivity, but I still see this as a rally in a longer term downtrend so I’m continuing to probe for low risk opportunities to place longer term short positions. So far I’ve avoided selling too soon.
Jason makes a good point that early next week (perhaps by mid week) may tell the tale. No doubt the immediate trend is up, but I’m increasingly wary that a top is being built since last week and we may be in a distribution pattern beneath the surface. SPX 1191-1192 is the key support area to sustain the bullish case, in my opinion.
Whidbey,-do u use cfd’s –contracts for a diference–to bet on the Rangers
if so what margin requirement do u get
Slow today. I’m history. CUmonday.
just back from salt lake from a unhappy family event and whilst i have been following the market some what i wont comment on it till i look at all my charts inds over the w/e
any how the market hasnt displeased me and has held up well for this dead cat bounce
the question for me now is has the invisable hand conned enough retailers and long only mutuals into longs so as the insto bank hedgies can take the opposite side–short
there are certain charts that will tell me
anyhow good to be back and looking at all my big monitors /screans and typing this from
from my confortable king size bed and listening to my nice soothing stero music
mind set is everything in trading and for me its just the fun of the game
could we possibly extend this dead cat for another 2 weeks so as i can have 1 weeks holiday in hong kong/macau
Jason.
I see your sector count has increased from 97 to 108. I use a 13 XMA/ 34 XMA cross on both indexes and sectors. That is how I define trend. I’d like to bring it down to the stock level, but I don’t know what stocks are used in each of your 108 sectors. Can I buy/lease/rent the list of stocks that are used in each sector or can you direct me to whomever has this list and I’ll ask them.
If you look at your country ETF’s for the industrialized nations, the trend is down for Europe, Britain, Russia, and Japan. If you look at the emerging markets, the trend is down for Brazil, India, Indonesia, and China. If you look at the DOW, SPY, NASDAQ, and Russell, the trend is down.
The pattern I see forming here is the same as 2007. This market will probably trend up for the next 2 to 4 weeks, and then roll over.The trend is South.