Focus On Weekly Chart For Position Evaluation
What Wednesday’s Action Tells
You
NYSE volume fell to 1.39 billion shares
yesterday, but remained positive with the volume ratio 63 and breadth +606.
The
SPX ($SPX.X) closed up at 1209.57, +0.3%, with the Dow ($INDU),
10,816, +0.5%. The Nasdaq ($COMPQ) closed at 2157, +0.3%, while the (QQQQ) was almost flat at 39.73 vs. Tuesday’s close of 39.68. The QQQQ
has
been churning the last three weeks, but is still holding the January 2004 39
high, which is now minor support, but it did hit a 39.09 low this week. The
initial downside line remains the five-week EMA at 39.45, which is also the
low
of the 12/13 high week when price made the 40.68 new rally high.
The year-end move for the major indices
started
the week of 10/25, and the QQQQ is +14.9% low-to-high so far vs. +11.1% for
the
SPX, +10.7% for the New York Composite (NYA) and +11.5% for the Dow. When
this
bull market starts to fade, the SPX will probably continue higher, while the
NYA
diverges. So, I focus on all of the weekly charts when making position
decisions. It keeps you away from the noise and all of the inane commentary
you
now hear, most of it based on short-term noise, not to mention the
always-wrong
economists.
Net net, the five-, 15- and 40-week EMAs for
the
major indices are all rising with no negative divergences yet in the primary
oscillators and, of course, after the rally, remained above the overbought
levels, as you would expect, and that is normal. We only care about oversold
when the trend is up, as it is now, and any negative divergences with rising
price and lower highs in the oscillators. That is what you’d want to tune in
on.
Right now the five-week EMAs are 10,632 for the Dow, 1192 – SPX, 39.45 –
QQQQ
and 7082 for the NYA.
The bond market closes at 1:00 p.m. ET today
and
half the “Street” will bail out early. This corner caught the
focus list stock
(
SBUX |
Quote |
Chart |
News |
PowerRating) yesterday, which is enough to bail out after the first hour and
go
down and have a few and maybe even leave a tip. Love those contracted
volatility
patterns near the highs.
Have a good trading day, and I wish everybody
a
Merry Christmas,
Kevin Haggerty
