Sunday, December 16, 2012

No clear direction

Market turned bullish (intermediate time frame) after climbing above 1,410 but the fiscal cliff debate seems to hold SPX back and doesn't allow it to establish a healthy uptrend. SPX is very close to revisiting the break out point, 1,410. Bulls need to defend this level in order to conserve the slim advantage they have at the moment. The good news is that SPX is making higher highs and higher lows on 2 hour chart. The bad news is that SMA 120 is flat instead of rising.

Weekly DMI is neutral after being negative for a few good weeks. Most of the time, in a bull market, once the DMI+ starts rising nothing can stop it. 

The last time weekly DMI+ started to move up then snapped back into the negative territory was in May 2008, a few moths before the big plunge.

Daily chart also shows higher highs and higher lows.

In conclusion, market is bullish on intermediate time frame but the trend doesn't look too healthy at the moment, it definitely needs to move up this week, to defend the 1,410 level. On long term market looks neutral to bullish judging by two indicators, SMA 200 and weekly DMI. 

I talked last time about a potential "head and shoulder" on AAPL. Well, AAPL moved bellow the "neck" and now the HS enthusiasts expect that AAPL is going to lose another 170 points, towards the 360 level. This seems very harsh but it may happen. However, around 470 AAPL has a very good support, its 4 years uptrend line. Let's see if it's going to hold.

Have a nice trading week!


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