Saturday, March 3, 2012

Another bullish week

Market moved down a little bit on Friday but remained positive for the week. SPX consolidated its position above April 2011 high but Dow struggles with 13,000 psychological level. However, Dow managed to close above 13,000 for one day this week.

The most bullish index is Nasdaq 100 (QQQ) without any doubt due to the amazing bullishness of AAPL stock. The weekly DMI screams "overbought" but AAPL managed to add another 45 points this week and will probably reach 600 soon. QQQ established an unbelievable performance, 9 bullish weeks in the row, something I haven't seen in the last 10 years, the maximum performance being 8 weeks in the row.

All time frames are bullish on every single index. The intermediate time frame on SPX, the one I like to trade, shows SPX getting rid of the slightly "overbought" situation since now resides between the two EMAs. Despite the overall bullishness I suggest a little bit of caution at this point. I am carefully watching SMA 120 that is now around 1359, only 10 points bellow the current SPX level. Once this level is crossed market tends to suffer a correction. Obviously we need to also have a confirmation from EMAs crossing, EMAs that are now flat. 

MACD looks different on different time frames. On daily chart MACD shows a bearish crossing. However, daily MACD is usually pretty choppy and not that trustworthy. On the other hand weekly MACD is a very good indicator and is still positive. 

I remain cautiously bullish at this time and prepare to switch sides if SMA 120 on 60 minutes chart is going to get crossed. 

All the best!


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