I’m bullish, here’s why
It was a
mixed finish last week for the key indexes in what was a pretty volatile 5 days
of trading. Much of the volatility stemmed from further hawkish Fed comments
and worries over Hurricane Wilma. In addition, this was the busiest week of
earnings season for market players to sort through. The major trend that I
noticed was a rotation out of Energy shares and into Technology names. This led
to the Tech-heavy NASDAQ Composite to outperform for a change. Behind this
rotation seemed to be solid earnings from the likes of Motorola
(
MOT |
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PowerRating), Google
(
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PowerRating). It was nice to see the major indexes stabilize, but I would have liked
to have seen a better bounce from such oversold conditions.
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Looking
ahead, I believe the key indexes may be approaching an important short-term
bottom. Before the bashers (and you know who you are) start drooling all over
their keyboards and firing off their “are you crazy???†emails, I’m merely
stating that the elements we’ve seen before are lining up together. If it
happens, that’s great. If not, I could care less! In recent days, there was
endless jibber-jabber from the “talking heads†regarding a possible market
crash, while put buying has continued at elevated levels. These bearish bets
and negative comments are exactly what’s needed to tip the boat and set the
stage for a decent rally.
Also
supporting the rally idea is the simple fact that we are approaching the time of
year that has been historically the most bullish for the equities markets.
The one possible fly in the ointment remains the Fed chief and his merry band of
Fed clones. However, with commodity and wage inflation declining recently,
the Fed could begin to tone down their comments. I’m not trying to be a
conspiracy theorist, but it’s not entirely out of the question that some of the
Fed’s recent tough talk has been a mild effort to “talk up” long rates.
Daily Pivot Points for 10-24-05
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| Symbol | Pivot | R1 | R2 | R3 | S1 | S2 | S3 |
| INDU | 10253.22 | 10312.98 | 10410.75 | 10470.51 | 10155.45 | 10095.69 | 9997.92 |
| SPX | 1180.32 | 1185.73 | 1191.86 | 1197.27 | 1174.19 | 1168.78 | 1162.65 |
| ES Z5 | 1183.17 | 1190.58 | 1197.42 | 1204.83 | 1176.33 | 1168.92 | 1162.08 |
| SP Z5 | 1183.77 | 1190.03 | 1196.27 | 1202.53 | 1177.53 | 1171.27 | 1165.03 |
| YM Z5 | 10265.33 | 10319.67 | 10399.33 | 10453.67 | 10185.67 | 10131.33 | 10051.67 |
| BKX | 96.39 | 96.83 | 97.27 | 97.71 | 95.95 | 95.51 | 95.07 |
| SOX | 443.16 | 445.16 | 448.47 | 450.47 | 439.85 | 437.85 | 434.54 |
Weekly Pivots for the Week of 10-24-05
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| Symbol | Pivot | R1 | R2 | R3 | S1 | S2 | S3 |
| INDU | 10280.49 | 10367.51 | 10519.79 | 10606.81 | 10128.21 | 10041.19 | 9888.91 |
| SPX | 1182.48 | 1194.41 | 1209.23 | 1221.16 | 1167.66 | 1155.73 | 1140.91 |
| ES Z5 | 1186.17 | 1198.58 | 1213.42 | 1225.83 | 1171.33 | 1158.92 | 1144.08 |
| SP Z5 | 1186.20 | 1198.40 | 1213.00 | 1225.20 | 1171.60 | 1159.40 | 1144.80 |
| YM Z5 | 10302.33 | 10393.67 | 10547.33 | 10638.67 | 10148.67 | 10057.33 | 9903.67 |
| BKX | 95.87 | 97.70 | 99.01 | 100.84 | 94.56 | 92.73 | 91.42 |
| SOX | 437.82 | 450.50 | 459.16 | 471.84 | 429.16 | 416.48 | 407.82 |
Please feel free to email me with any questions
you might have, and have a great trading week!
Chris Curran
Chris Curran started his trading career at the
age of 22 with a national brokerage firm. He combines fundamentals and
technicals to get the big picture on the market. Chris has been trading for 15
years, starting full time in 1997, and has never had a losing year as a
full-time trader.