Friday, April 26, 2013

SPY April 26 2013

SPY April 26 2013

After a dramatic market recovery this week, the market took a bit of a breather on Friday. The seemingly chaotic volatility, though, held a secret logic only the market realized. As you will see in the chart below, the most important levels held like champs throughout the day. The uptrend from last week remains firmly intact.

SPY chart
SPY thirty-minute chart from April 18 lows

Monday's action should be decisive for the life of this uptrend. Next week is make-or-break in terms of reaching new highs on this surge. The ability of the market to withstand very weak economic data on the GDP and Durable Goods without folding was perhaps the most encouraging thing of all for Bulls.

Thursday, April 25, 2013

Futures Trading Example

S&P Futures around 1 2 a.m EST April 26

On the chance this might interest some traders of the futures, the above is a picture of the five-minute chart for the futures (ES) on April 26 2013 early in the morning. The pattern may leap out at you, but if it doesn't, observe the bottoming formation. That looks like an inverted head and shoulders or, if you don't like that interpretation, at least like a cup pattern. Both of those are Bullish formations. If you are trading, seeing that generally is an indication to go long. Futures kept rising for a few minutes after this point in time before pulling back again.

The patterns work because selling pressure gradually gets exhausted during this type of pattern. You could see the volume drying up if you were watching closely. Eventually, the Bulls move in for the kill, which is exactly what happened here.

SPY April 25 2013

SPY chart April 25 2013
April 25 2013

Another fairly indecisive day, but it did help us sort out some of the market's recent mixed signals. Anyone who thinks this epic Bull run is over is not looking at the facts. We'll all know when it's over.

It is a hop, skip and a jump to the nominal all time high in SPY. Anything is possible, but at this point, thinking that we won't get there is not based on anything I can see in the charts.

Wednesday, April 24, 2013

MPEL April 24 2013

MPEL April 24 2013
MPEL April 24 2013

MPEL is one of our old favorites, which we were talking about a year ago. Funny thing is that it was ramping in March 2012 just as it is now. Back then, as you can see from the below old chart (still available elsewhere on this site), MPEL was in the 13s. Now, of course, it is in the 23s. Not a bad appreciation in only one year.

MPEL March 2 2012

MPEL is a quality casino company, great prospects for this outfit overseas. Kindly make sure you do your due diligence and use stops, as always.

SPY April 24 2013

SPY April 24 2013 with candlesticks

With a very tight range, today's action was a consolidation day. The urge to take profits must have been intense for some traders, and there was weak economic data in the morning that gave them the perfect excuse. There were many weak earnings reports to digest, especially the so-so AAPL report that could have rocked the market. However, the averages held on and even showed signs of strength at various points during the day when they easily could have rolled over instead.

The controlling chart patterns aren't clear yet: head and shoulders, Bull Flag, uptrend channel, Doji Evening Star. The next move, higher or lower, will do a lot to establish which chart patterns are in control. For now, we simply play the uptrend channel as normal.

Below is an Ichimoku chart that does a good job of showing the support that exists right below the uptrend channel. For those unfamiliar with these charts, the main cloud is that dirty looking area right under the uptrend channel:

SPY Ichimoku clouds
SPY April 24 2013 Ichimoku chart

Today's advance was led by Industrials, materials, finance and retail. The other sectors that had been leading took a break, causing some sector rotation. There doesn't seem anything particularly ominous about that.

The below SPY chart also has something interesting going on:

SPY chart April 24 2013
SPY April 24 2013 showing SARS Parabolic lines

We have gotten back over the Parabolic SARS line that SPY was riding for much of the uptrend. Staying above it today was a good sign for Bulls. It may mean little in the long run, but it does help show that things are back as they were before the little correction of last week.

Tuesday, April 23, 2013

GLW April 23 2013

GLW April 23 2013

GLW is a stock we were following last year around this time. While it has had its ups and downs, it still basically is in the same place. It is a quality company, stable, and tradeable. It is in one of its periodic downtrends., this one is worth watching for a break out of its usual channel. The company has a lot going for it fundamentally, why it is stuck in the low teens is a bit of a mystery. It happens to report earnings tomorrow morning, which may kickstart it.

For comparison, below is one of our charts (there were several) of GLW from April 2012.

GLW April 2012

SAN April 23 2013

SAN April 23 2013
SAN April 23 2013

SAN, the Spanish bank, is an old favorite of mine. I was watching it back in 2011/2012, when it traded under ticker symbol STD, watching it crater. I never did bite, a mistake on my part due to hysteria about Europe's banking crisis. Europe is muddling along now, and SAN has had its ups and downs. It appears ready for another upward move, having started moving higher in stealth mode. Note that this is a good stock for an IRA, since it pays a very nice dividend. Kindly do your own due diligence as always.

SPY April 23 2013

SPY April 23 2013

Today's market rally brought SPY into a decisive point for two chart patterns with completely different implications. Many believe that a head and shoulders topping pattern is forming. A consolidation or pullback here would tend to support that. Another growing possibility is that the old uptrend channel is still working, and there is no topping pattern at all. The coming days should resolve this issue and give us a good read on market direction.

IWM April 23 2013

IWM April 23 2013

IWM had a big day, bringing it toward the top of its channel. Odds are good that further upside right now is limited, with better entry points awaiting.