The S&P cash index broke above 1114 into 1116 so that makes me short term neutral the stock market. The market has been consolidating the past couple weeks, moving sideways and getting nowhere. This usually leads to breakouts. With the market holding up and eeking out new highs, despite the evidence suggesting a top, it hints to me that it wants to move higher. Points of possible resistance are the 1121, 1150, and 1200 levels. I'm not sure we'll get that far in anything other than a wild erratic blowoff top, if any rally at all, but those levels are worth watching.
Looking at the Australian dollar vs. the US dollar (AUD/USD) it only has made 3 waves down from the 0.9410 high, which is a correction as it stands right now. It could be a series of 1s and 2s like I labeled it, but it needs to stay beneath 0.9321 to keep that count as a strong possibility, and of course 0.9410 is ultimately crucial to the bearish case. Remember, a bearish AUD/USD is a bullish US dollar essentially. A bullish dollar means that the stock market should decline. So since 1114 fell in the S&P, let's turn to the dollar again for clues on the stock market's future movement. So an AUD/USD break above 0.9321 would hint a stock market rally phase is underway, and an AUD/USD break above 0.9410 would confirm it.
Nothing really stellar to report on the stock market other than breaking 1114 in the S&P and the the fact that the high risk small cap and tech stocks are rallying much stronger today than the Dow and S&P, which is concerning for the bears. I'll be back when something of interest develops. And as always, I welcome all your thoughts and analysis as well.
PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.
4 comments:
Hello Todd:
I cannot see the picture with the intraday action, but day by day we have not any break important for one downtrend in the stockmarket or one uptrend in the dollar index.
Saint Patience Batman!!!
Regards.
Hey Gustavo, good to hear from you again. The market hasn't broken down yet and even Batman might not have the powers to have the kind of patience we've had to endure. Check out my post today, it sets up for an interesting jobs-report-Friday.
Talk to you later!
Todd
Todd:
I was reading your blog with no many important to say.
The good points today is to see the Bank of Japon tired about the continued strengh of the Yen, and was an interesting move for the dollar in general.
I hope Monday can be a day for remember.
Black Monday, 19 October 1987 – the largest one-day percentage decline in recorded stock market history.
It's time:-)).
Very interesting action in the dollar and precious metals today, as well as its impact on selling off the stock market after the good jobs report. We'll see how the day closes, and then of course Monday will be key to any follow through or what not.
Todd
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