Market went up this week but not enough to make a decisive break on the upside. It remains slightly bellow the previous high on the weekly chart. Despite the few points gained this week the intra-day action was quite bearish, strong mornings but weak afternoons, almost reversal days in a few instances. What I don't like, from a bullish point of view, is that the market didn't react strongly once the QE3 news was released. We had a couple of days on the upside with a nice gain but that's it. No continuation, no meaningful rally. Granted the QE3 news hit the Wall Street after a nice three months rally! Keeping this in mind I am not as bullish as I was 2-3 weeks ago. If market manages to establish a clear higher high (1,490 or above) the rally is saved but any pull back before that and especially a drop bellow the most recent low on weekly chart (1,440) could spell trouble.
Daily and two hours charts look a little bit better in a sense that market managed to equalize the most recent high (around 1,470) but no higher high as well. The 3-4 months rally uptrend line is around 1,420 which coincides with the rising SMA 50. So somewhere in the 1,420-1,440 area SPX should find support on intermediate time frame.
Two hours chart shows a positive EMAs crossing and market above SMA 120. Also market is above both EMAs which usually translate in the fact that is a little bit overbought in short term time frame so a drop in the 1,450 area wouldn't be surprising.
In conclusion, I remain bullish on long and intermediate time frames but I keep a close eye on a rally that seems to be out of steam despite QE3.
All the best!
babaro
P.S. Two stocks you may want to consider, EPOC and ENOC
P.S. Two stocks you may want to consider, EPOC and ENOC
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