Good morning. Happy Tuesday.
The Asian/Pacific markets closed mixed. China and Hong Kong dropped more than 1%; there were no 1% winners. Europe is currently down across the board. Belgium, France, Germany, Amsterdam, Norway, Stockholm and London each dropped more than 1%. Futures here in the States point towards a large gap down for the cash market.
The dollar is up. Oil and copper are down. Gold and silver are down.
The big question after the Russell finally broke out and joined the other indexes in higher high territory is whether it was a legit breakout or will prove to be of the false variety. As of now all of yesterday’s gains will be wiped out at today’s open. This is what I wrote yesterday.
I believe tomorrow is going to be a pivotal day. Many breadth indicators diverged from the price action and have now curled up. The small caps, which have been lagging, finally broke out to a higher high. There have been many reasons the market could have sold off (buy the rumor, sell the news scenarios with regards to earnings, employment numbers, FOMC, Greece, options expiration), but it hasn’t. Now that most things are in the rear-view mirror and so many of the bears have finally thrown in the towel, in a sick way, this is the time the market could surprise everyone and drop. I’m not predicting it. I’m just saying to be aware of its increased probability. This is why tomorrow is important. Can the small caps follow through on today’s breakout and put some distance between itself and resistance, or will today’s move prove to be of the false variety and immediately get sold into? We’ll see.
These are still my dominant thoughts because I’ve seen the scenario play out many times. The market climbs the proverbial wall of worry and ignores warning sign after warning sign, and then, when the stars align to support the next leg up, the market corrects. Be on the lookout. Manage your positions wisely.
headlines at Yahoo Finance
headlines at MarketWatch
today’s upgrades/downgrades
this week’s Earnings
this week’s Economic Numbers
0 thoughts on “Before the Open (Mar 20)”
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Yo Pete, do you have an opinion?
Yo, Brian! – From SPX 1340 (assume that’s the end of wave 4 of C), I’m having trouble counting a 5 wave advance on the hourly chart, so I’m thinking it may be wave 1 (3 waves) of an ending diagonal. If so, I’m looking for a 3 wave decline to some Fiblo support level, after which we see the continuing grind higher to complete the overlapping 5 waves of the ending diagonal. I’d have to see 1368 taken out to even entertain the idea that a longer term top has been put in place. Until then, I’m watching to see whether this decline unfolds in 3 or 5 waves.
I’m down with 3 of 5 of C being done with the high yesterday. 1368 is my current top of 1 of 5 of C making it a critical point in my current count. I’m enjoying the break of the trend line drawn from the conclusion of 2 and 4 of 5 of C. We’ll see how the price action is when testing the underside of that line.
More leader / group rotation. More buy the dip in the leaders.
More model failures.
Almost time for congressional / future lobbists at the money trough posturing.
XLK & XLF remain well above their 10/20 day EMAs while the remaining sectors are testing their 10/20 day EMAs, with the exception of XLU, which has broken its 50 day EMA. AAPL appears to be consolidating (or at least trying to) between 575-600.
Seems to be a bounce in large caps but not small caps.
The DOW ain’t in a RUT?
fed gets more bounce without the big footprint, especially stocks in multiple indexes ie msft
I didn’t know the Fed bought equities and why would they get a bigger bounce on less volume unless they’re the price marker upers.
jesus christ Ive already told you how they do it. you can’t teach a pig to sing, it only wastes your time and annoys the pig
Oooops!
PIGS, what’s left when you remove the ‘G’? I know, I’ve got too much spare time.
Another wild prediction –
When sensible healthcare & education cost are reigned in the US mrkt will explode.
Consider that due to a perversion of capitalism both sectors have collected a bunch of useless private sector middle men, parasites that have pushed costs of business and growth higher than any other country in the world.
The bias is still up, the prop computers are being used to nimbly rotate leaders and hide volume. To play the suckers.
Get good at musical chairs.
Raymond – Geez! I hope I’m not considered a healthcare parasite as I sell both group & individual health insurance (although my commission doesn’t increase the cost to my health care clients). But, enough of that.
You make a good point about backtesting, etc. below. Regarding EW, the problem is that wave counts are always subject to interpretation, e.g. have we completed wave 3 of 5 of C or are we still in wave 3? Only on hindsight do you know. And you’re right, individual bias can influence your wave count (“forcing” the count to fit your admitted/unadmitted bias). But I guess you can say that about all forms of technical analysis.
Your comments are well taken and have been food for thought, at least in my case.
Anyone who has trade station or even telecharts trying doing some back testing based on your trade set ups and market bias.
See if the all the elements of Edwards & Magee and EWT actually work all the time, how predictive vs reactive they are. It will make you more profitable or at least stop spinning your wheels.
AAPL pushing new all time highs.
May be a replay of BIDU moving from 900 to 1650 (split adjusted) before a roll over. Same idiot analyst nonsense back in 2010. Yup, got shook out, but jumped back in full load and kept swinging. Use both common sense / historically proven fundamentals and technicals.