Tuesday, December 14, 2010

Another flat day

No drama today, SPX moved up a few points in the morning and closed flat, the same move we saw yesterday. Market remains bullish on all time frames but it looks overbought in short term. I expect SPX to come close to EMAs soon. It doesn't necessarily mean market will plunge, even if it holds still the EMAs will intersect price soon since they are rising.

SPX came closer to EMA25 today but is still too far away from SMA 120. Volume was not great on SPY but it touched 50 days moving average for QQQQ. By the way QQQQ (Nasdaq 100) has reached the 2007 top! 

Looking on longer time frames, weekly chart, I notice that SPX reached the September 2008 level. You remember those terrible 3 weeks when SPX plunged 350 points, don't you? Well that huge gap is now officially closed. From now on SPX will have more trouble advancing since the volume between 1250 and 1550 is pretty impressive. It doesn't mean market won't advance, it just means that the economical news need to be more bullish than they were from 2009 until now. 

All the best!


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