Even The Media Is Telling You To Buy After +7.8% In 13 Days
What Thursday’s Action Tells
You
It certainly didn’t seem as if there was NYSE
volume of 1.4 billion shares yesterday considering how the SPX
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traded. Price advanced to 1168.89 by 10:45 a.m. ET, then traded in a 1.3
point
range until 12:00 p.m. For the next two hours, until 2:00 p.m., the SPX
traded
in a 1.8 point range between 1170.68 – 1168.88. It then advanced to 1174.61
and
traded in a 2 point range from 2:00 p.m. to 4:00 p.m., closing at
1173.48.
The market and liquidity definitely had that
holiday (bond market close) erratic liquidity and feel. The volume ratio
finished positive at 75, as did breadth at +1538, which reflects the fact
that
Wednesday’s internals were stronger than the small loss that day in the SPX.
The
percentage gains for the major indices yesterday had the SPX +0.9% to
1173.48,
the Dow
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and
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PowerRating) each +1.4%. Suffice to say the
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advance. It was also positive that the XBD was +1.7% and the CYC +1.2%. The
RTH,
which is extremely extended, was +1.0%. The TLT declined for the fifth
straight
day at -0.2%, but that shouldn’t be such a surprise to you.
The SPX and IWM are the most extended and are
out
to their +3.0 standard deviation bands, followed closely by the QQQ, then
the
Dow which hit its +2.0 band yesterday (intermediate bands). The extended
price
continuation enters the mid-November minor time dates through Tuesday. It is
not
the time to be aggressive on the long side, regardless of any
hype.
Individual stocks like
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Higher
Bottom,
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as
opposed to the ESZ4 which remained in a narrow range for two different two
hour
periods, so you got timed out if you were long, as it was dead
money.
The SPX closed at the top end of the
1169.50 –
1175 minor resistance zone yesterday at 1173.48. Yesterday was the 13th day
of
the rally off the 1090 key time and price zone (Generals’ Pullback). The SPX
is
+7.8% in 13 days, so you can be the longside hero, not this corner, which is
still riding the 1090 entry with trailing stops.
Have a good trading day,
Kevin Haggerty