Great Trades
Great stock trades based on fundamentals and technical analysis.Thursday, April 16, 2009
Pullback over next couple of days?
The first one is one we've posted before, showing the 10-day EMA of the NYSE Tick:
Previous times when the 10-day EMA of TICK spiked to the 600+ area, the market sold off from there. However, this rally's been different, as evident in this close-up view of the same chart:
During this whipsawing rally, today was the 6th time this indicator spiked above 600. Each of the 5 previous times, marked with a vertical blue line, the market sold off the next couple of days, twice bouncing back up off the second day low. If this time is like the 5 previous times, the market should sell off into Monday. If it's like the times before this rally, the selling should last more than just 2 days.
This chart shows the % of S&P 500 stocks above their 50-day moving average:
Before this rally, spikes over 80% preceded significant selling. This spike has reached higher than the last few, at 88% today.
Finally, this hourly chart of the S&P 500 shows a huge rising wedge along with a bunch of bearish divergences on PPO (similar on other indicators):
Each spike to a higher high over the past month has made a lower high on PPO. If this one does the same thing (it's still on a buy signal), it will be an amazing 5th lower high on PPO while the market makes a higher high. Such bearish divergences usually lead to selling, but this rally has been very resilient.
We'll see if the market pulls back the next couple of days, and if that pullback (if it comes) gets bought up quickly like the 5 previous ones. It should be interesting to see how this plays out.
Archives
December 2005 January 2006 February 2006 March 2006 April 2006 May 2006 July 2006 August 2006 October 2006 November 2006 December 2006 January 2007 February 2007 March 2007 April 2007 May 2007 June 2007 August 2007 October 2007 November 2007 May 2008 September 2008 October 2008 January 2009 February 2009 March 2009 April 2009 May 2009 June 2009 July 2009 August 2009 September 2009 October 2009 November 2009 December 2009 March 2010 May 2010 June 2010
Great Trades Home Email GreatTrades
Great Investments Blog Great Investment Articles BlogDisclaimer: Great Trades may have a position in all or some of the stocks discussed in this blog, but is not paid by any company to promote their stock. Great Trades contains opinions, none of which constitute a recommendation that any particular security, transaction, or investment strategy is suitable for any specific person. Great Trades does not provide personalized investment advice.
