This Market Is Trying To Turn
In yesterday's piece I showed that the broader averages are lagging well behind the leading Nasdaq 100. Today I will take a look at a couple of my favorite charts with their oscillators to see where we are from an internal strength standpoint.
First let's look at the daily S&P 500. The first thing that jumps out at me is that the 76 day moving average (the blue line in the top pane) is trying to flatten and turn higher. That hasn't happened since the April/May 2008 time period. Price has also broken its downsloping trend line off of the September 2 high. Just above yesterday's close, however, is the 76 day moving average which has acted as resistance since last June.
Notice in the second pane how the NYSE volume oscillator has also broken its downsloping trendline, which is a positive. Enthusiasm there is tempered somewhat by the lag in the advance decline line as that has not broken its downtrend line in a decisive way (bottom pane).
FInally, if you look at the very top of the chart, there is a cycle change point due in the Feb 16 - 20 timeframe, based on the S&P's 36 - 40 trading day cycle. That falls in line with the time cycles laid out yesterday using other time measurement techniques such as Gann and Fibonacci. That means we could see a continued push higher next week, but traders need to be ready to lock in profits by the end of next week. One more note: the downtrend line off of the September 2 high is much steeper and therefore easier to break when a market shows any sort of stabilization. The downsloping trendline off of the November 4 high that I have referred to many times is not even close to being penetrated by the broader indices (including the S&P 500) as I outlined in yesterday's piece. I merely wanted to show the penetration of this downtrend line to coincide with the penetration of the downtrend line on the NYSE volume oscillator, which now confirm each other. Below is the S&P 500 chart:
Next we have a daily chart of the Nasdaq Composite which also shows promise, but with its own dose of caution. Cyclically, it is close to another cycle change point as its 28 - 32 trading day cycle comes into play in the February 16 - 19 timeframe. Also note that it has rallied right up to resistance at the downsloping trendline off of its November 4 high. Again, this is a case of a broader index lagging the Nasdaq 100. Until other broader based indices confirm the breakout of the Nasdaq 100, it is best to tread lightly. Do not fall in love with the long side - yet.
First let's look at the daily S&P 500. The first thing that jumps out at me is that the 76 day moving average (the blue line in the top pane) is trying to flatten and turn higher. That hasn't happened since the April/May 2008 time period. Price has also broken its downsloping trend line off of the September 2 high. Just above yesterday's close, however, is the 76 day moving average which has acted as resistance since last June.
Notice in the second pane how the NYSE volume oscillator has also broken its downsloping trendline, which is a positive. Enthusiasm there is tempered somewhat by the lag in the advance decline line as that has not broken its downtrend line in a decisive way (bottom pane).
FInally, if you look at the very top of the chart, there is a cycle change point due in the Feb 16 - 20 timeframe, based on the S&P's 36 - 40 trading day cycle. That falls in line with the time cycles laid out yesterday using other time measurement techniques such as Gann and Fibonacci. That means we could see a continued push higher next week, but traders need to be ready to lock in profits by the end of next week. One more note: the downtrend line off of the September 2 high is much steeper and therefore easier to break when a market shows any sort of stabilization. The downsloping trendline off of the November 4 high that I have referred to many times is not even close to being penetrated by the broader indices (including the S&P 500) as I outlined in yesterday's piece. I merely wanted to show the penetration of this downtrend line to coincide with the penetration of the downtrend line on the NYSE volume oscillator, which now confirm each other. Below is the S&P 500 chart:
Next we have a daily chart of the Nasdaq Composite which also shows promise, but with its own dose of caution. Cyclically, it is close to another cycle change point as its 28 - 32 trading day cycle comes into play in the February 16 - 19 timeframe. Also note that it has rallied right up to resistance at the downsloping trendline off of its November 4 high. Again, this is a case of a broader index lagging the Nasdaq 100. Until other broader based indices confirm the breakout of the Nasdaq 100, it is best to tread lightly. Do not fall in love with the long side - yet.
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