|SPY August 8 2013|
For those who watch the market closely, Thursday August 8, 2013 was the same story we've been seeing recently. Market moved lower off the open, found support above recent lows, and then spent the rest of the day grinding higher. The close was toward the top of the day's range, but the morning highs at the open were never bettered. Yesterday's lows held, which was the most important outcome. Both Bulls and Bears are frustrated by days like this.
The market appears to be attracted to the value area of about 1690 on the futures, give or take a few points each day. When this has happened before during this rally, lulling everyone to sleep, it invariably has resolved to the upside with some weird, out-of-the-blue take-off. So far, obviously, we haven't seen that.
The failure to recover 1700 on the futures is interesting but not a worry at this point for Bulls. The below chart of the futures shows that the market is forming another rising wedge. Last time, as you can see, that resolved to the upside. What you look for as a resolution is one of those out of nowhere parabolic take-offs. You certainly don't want to ride one of those short if you can help it.
|S&P 500 Emini Futures August 8, 2013|
So far, if you are trading, the proper play has been to buy the dips and sell the rips. That seems like a reasonable strategy to continue until it stops working. Still Bullish, but that doesn't mean we won't continue seeing these little corrections that can be a bit scary if you are on the wrong side of the trade.
A Curiosity From the PastSaw an interesting chart that somebody posted in a Youtube video in November, 2010. It's kind of eerie how this guys - whoever he is - plotted everything out back then.
You know the old saying - a stopped clock is right twice a day - but this guy was spot on about what has happened to date. I don't know who he is, but kudos to him. Credit where credit is due, dude. Incidentally, his plot suggests the top of this drive higher is going to be around 1820 in "late spring 2014" - which, actually, sounds quite possible and almost, dare I say it, probable.
You may view the video here.