SP500 Reached All Time High

The stock market continues its march to record high last week, will it continues to make new record this week. In this video, we will look at the price action and identify some possible scenarios for the coming week for the stock market and these stocks: ROKU, TWTR, BABA, and the VIX.

Stock analyzed: ROKU, TWTR, BABA, VIX

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Market Decided To Move Higher

As the Fed chairman reassure the market it will continue with its easy credit policy, the market took off to new high territory. Although the DJIA and the SP500 closed with a new all time high, but they still have not closed above their all time intraday high. Short of any negative surprises from this earnings report season, the

Still Deciding

The market is still trying to establish a direction. It is still at a crossroad that it can push toward the upside, or it can easily retreat from current resistance and move back to test recent support level. Until the market has

At The Crossroad

The market is at the crossroad once again. One move from the market and it will propel into another new high or it will dip below the recent pivot support to begin an extended downward move.

As stated previously, the June 10, 2013 intraday high from the DJIA, the SP500, the Nasdaq 100, and the Russell 2000 are the pivot levels the market needs to penetrate in order to resume its uptrend. If the market failed to move above the June 10 high and dip below the June 6, 2013 intraday low for the DJIA the SP500, the Nasdaq 100, and the Russell 2000, then the market will likely be headed down to a level that will likely exceed the typical 5-8% correction. The dip below June 6, 2013 low will affirm the new all time high of 15,409.39 made by DJIA on May 28, 2013 is the market top as measured by the DJIA and by the Dow Theory non-confirmation by the DJT.

(click on the chart to get an enlarge view)

SP500:



DJIA:



DJT:



Nasdaq 100:



Russell 2000:

The Market Bounced Back

The market closed the week with a gain after a few days of triple digits loss for the DJIA. On Thursday when the SP500 came down to the widely watched support level near 1598, it behaves like clockwork and bounced of this support level. The market continues to move higher on Friday and closed the week with a gain near the high of the day at 1643.38. Similarly for the DJIA, after two consecutive down week, it also closed the week with a gain at 15,248.10, the Nasdaq 100 closed up for the week at 2990.87, and the Russell 2000 closed at 987.62, up for the week.

Stock Market Review - 6/6/2013

Here is a quick look at what the market did and where it might be headed.

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Uncharacteristic!

The DJIA was up since today's opening while the SP500, Nasdaq 100, Russell 2000 and the DJT all were negative. By the end of the trading session, the DJIA closed with a gain of 138.40, SP500 plus 9.68, Nasdaq 100 a gain of 9.03, the Russell 2000 plus 6.387, and the DJT closed with a loss of 1.91. These gains and loss are no big deal. But what is the big deal is the uncharacteristic of the market breadth indicator

Fatigue Market

The market continues to show signs of fatigue. After the big run up on the first trading session of the week, all the major market indices ended the week with a loss.

On Friday, selling picked up in the last hour and an half of trading. There were talks the last minute selling is due to end of the month rebalancing. But whether it is rebalancing, the talk of end of QE-infinity, the selloff in

High Alert From The Rest Of The Market

After the Memorial Holiday, the U.S. market resume trading and it opened strongly with the DJIA up more than 200 points at one time, then the market started to retreat and the DJI gave back half of its gain to close at another all time high at 15409.40, +106.30 for the day. The SP500, Nasdaq 100, Russell 2000, and the DJT closed with a gain for the day as well, but they failed to close at a new high.

Until The Market Change Course

The market continues its upward march. After showing sign of a possible non-confirmed high might be in the making, it reaffirms its desire to move to higher level. The small caps Russell 2000 index is once again making new high along with the SP500 and the DJIA, even the DJT participated with the recent new high party until the last trading session, May 11, 2013. On May 11, the DJT failed to make a new high while all other major market indices made new high. This failure could be simply another temporary divergence between the DJIA and the DJT or it could be the final warning from the Dow Theory to alert us to prepare for the imminent market top.

As the market has displayed time and time again, those that try to call the market top will be reminded who is the boss and will get punished, and those that exercise diligence and patience on listening to what the market has to say will be rewarded. At the present time, the market continues to punish those going against the prevalent trend. Let’s remind ourselves, the market topping out is a process and not an event, and it does not just reverse itself on a dime. The market has to complete the process of money transfer and risk transfer before it changes course. This transfer process takes time and as this process progress, the attuned students of the market will see this process play out. Until the market start showing signs that it is in the final stage of this transfer process, one should continue to ride the trend cautiously or head to the sideline and observe.

Here is a video that review the recent market price action and highlight some of the intermediate key levels the market might be targeted.

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Finally A Pull Back

The market finally pull back a bit last week. But it appears there are still dip buyers willing to commit cash in this market. Until these dip buyers are all in, the market will continue to grind higher. For those bears that are impatience, they will continue to be chopped as the market setting up the trap to remind those dip buyers who is the boss.

Here is a video reviewing the market and what to expect for the near term.



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Finally A New All Time High

After a few attempts, the SP500 finally made a new all time high. The question now is where will it go? Looking at the price actions, it appears it wants to go higher until various market breadth indicators get weaker.

Although in the near term the market seems to want to head higher, but couple of the big cap tech stocks appears to be bucking the trend, they are AAPL and GOOG. Both of these stocks are nearing critical support level. If they break below these support levels, they could lead the market down for the long awaited correction or a trend reversal.

Here is a video reviewing the market indices and the price actions for AAPL & GOOG.

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Correction: I inadvertently referred to the fib 161.8 as 168 in this video. It should be 161 extension.




Disclosure: No position on AAPL & GOOG

The Anticipated New High For DJI

The game the market play is a very simple game of money transfer, transferring money from one pocket to another pocket. The process it uses to play this game is similar to the wholesale/retail business, buy the stocks at wholesale prices and sell it at retail prices.

Today, the DJI closed at another new 52 weeks/multi-years high. Just as I have stated in my 2/20/23 posting that another new high for the DJI is expected. The difference between today’s new 52 weeks high from the previous high is a lack of confirmation from the other market indices. Be cautious and don’t get trapped by this market topping process.

Here is a video reviewing today's market price actions.



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Disclosure: Long SPY PUT

A Reminder From The Market - Featuring AAPL

It has been a while since the market has experienced a down day of more than 1%. Today, lot of stocks reversed with big losses. This bring out all those talking heads that been proclaiming the market is overdue for a correction. Whether or not today's price action is the beginning of a correction, it should at least serve as a reminder to all the market participants that it can get ugly when this market reverse direction.

Based on the Dow Theory and the recent confirmed 52 weeks high for the DJI, the DJI could make at least one more new high before it tops out. How deep and how long this pullback will last? No one know. Just watch the price action and those resistance turned support levels, and trade what you see.

Here is a brief video reviewing the latest price action for AAPL.



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Another New High For The Market – Featuring FB

Today, the market made another confirmed high with the DJI and the SP500 closed at a new 52 weeks high, while the DJT and the Russell 2000 closed at another new all time high. The only index that is still lagging behind is the Nasdaq 100. While all these market indices are making new high, the negative divergence between the MACD and the indices continue to persist.

Although there is a high level of anticipation of a pullback or a correction, the market continues to frustrate the anxious bears and the sideline dip buyers. Base on historical market behaviors, the long awaited pullback will not occur until those frustrated dip buyers lose their patience waiting for a pullback and chase the market by diving in at all cost. In the meantime, there are stocks that have the potential to move higher base on its own technical price structure. One such stock is FB.

Here is a video briefly summarize the latest market move, and a technical look at the price action for FB.



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Disclosure: Long FB

You Have Been Warned

Today, you have been warned again by the market that the party is about to be over. If you decide to join the party at this time, don't plan on staying long, as this party can come to an end without further notice.

The DJI closed at another multi-year high today at 14,018.70 along with the SP500 and the Russell 2000. But the DJT failed to confirm the DJI new closing high. This is another sign from the market telling you to be defensive; reduce your position size and tighten your stops!

click on the chart to enlarge

DJI

DJT

 

Post Election Move

The US election is finally over and the market has returned to focus on the fiscal cliff and the Euro crisis.  Since the brief rally on election day, the DJI gave back 430 points (3.2%), the SP500 loss 48 points (3.3%), the Nasdaq 100 dropped nearly 97 points (3.6%), and the Russell 2000 loss more than 30 points (3.7%).  The week ended with all the indices closed below their 200 moving average.

Next week is another monthly options expiration week and expects increase volatility.  A dead cat bounce rally could appear before OpEx and this rally should not be bought until the market has clearly shown sign of a reversal.

Here are the charts for the market indices highlighting the possible resistance and support levels.

DJI

SP500

Nasdaq 100

Russell 2000

Stock Market Review - 10/13/2012

The market continues to pull back with increasing negative sentiments.  Ever since Oct 5, 2012 non-confirmed closing high from the DJIA, the market has headed down.  Although the SP500 is still holding on to the 50 SMA, breaking the baseline of the double top price pattern does not bold well for this index.  The nasdaq 100 and the Russell 2000 are under their 50 SMA with declining 20 EMA.  Having GOOG earnings report due out next Thursday after the market close and next week is October options expiration week, the market is bound to experience some wild price movements.  I will be very suspicious in the sustainability on any rally at this juncture.





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Disclosure: Long SPY PUT & QQQ PUT

Dow Jones Industrial Made A New 52 Week High

Today the Dow Jones Industrial index made a new 52 week high, closing at 13610.20 eclipsing the previous closing high of 13596.93 made on 9/20/2012. 

The difference between today's new high versus the previous new high is non-confirmation from all the other market indices: SP500, Nasdaq 100, Russell 2000, and the Dow Jones Transportation.  This total non-confirmation is a sign of a market top.

On the  following chart, the yellow arrows highlighted the last high from each market index and notice the progression on dropping off from confirming with the DJI new high.

Until a major correction (trend reversal move) has occurred, I will be either on the sideline or on the short side.

Disclosure:  long SPY PUT

Has The Market Topped Out?

The market has a very subtle way for signaling a change in its major trend direction. Sometimes it will set off the alarm using the Dow Theory and other times it will set off divergence amongst the market indices.

Recently, the latter was the method the market has decided to use for signaling it has reached an intermediate top and it is preparing to change direction. Here is a chart showing how the divergence occurred, notice the new 52 week closing high for the DJIA, SP500, Nasdaq 100 and the Russell 2000 did not occur on the same date.



Furthermore, the SP500, Nasdaq 100 and Russell 2000 have peaked before the DJIA reach its peak on 9/20/2012. This indicates the DJIA made a new non-confirmed 52 week closing high on 9/20/2012.

The Nasdaq advance/decline line and the daily net new high-new low indicator have also peaked on 9/14/201, days before the Nasdaq 100 index closed with a new 52 week high on 9/19/2012. By not having the market breadth indicators to confirm the new closing high is a sign an internal top has been made. Here is the chart of the Nasdaq 100 and its breadth indicators:



Similarly for the DJIA, the New York Stock Exchange advance/decline line and the daily net new high-new low indicator peaked on 9/14/2012 and the DJIA made another new 52 week closing high on 9/20/2012.



Notice how small the difference between the 9/14/2012 closing high and the 9/20/2012 closing high, it is only 3.56 points (13593.37 vs 13596.93)..subtle!

Although the market gave off various divergence and non-confirmation signals, it does not necessary mean an immediate beginning of a new bear market or a big sell off. But it does signal a major correction could be in the offing, and one should be very cautious on initiating new long positions and be very defensive on existing long positions. After the market has reached an internal top, a sudden change in direction can happen when it is least expected. Therefore, trade cautiously and defensively until the market establishes a new trend.