Here Is The Current Technical Picture
The weekend financial talk shows were once again offering very critical clues
as to the future direction of the market. As we all know, the major networks
love to parade out men and women who probably have never placed a trade on
behalf of their own account, yet they are designated the so-called experts. Yes, they dress nicely, speak eloquently, yet have missed every major turn in the
last three years — wait — no, every turn since who knows when. And what was the
general consensus from this elite group of financial professionals? Higher
levels from here. (FYI: I did write this on Saturday morning. Hey,
better to be lucky than smart given that the market is much lower in pre-open.)
Well, as someone who realizes that his abilities to predict the future are, at
best, well thought out educated guesses, I think it is safe to say that they
will once again be wrong. Sure identifying a short-term top is not imperative
for HVT, but as we all know, HVT is
not the only game in town, and I frequently like to have other positions working
in the background to take advantage of longer-term moves. Some good short sales
are on the horizon.
The chart below of the S&Ps is impressive, make no mistake about it. The
question is “How much of this was generated by the emotional blow-off of the
war, short covering and the always-late portfolio managers scurrying to not miss
out on the next bull market?”
The answer is all of the above, but let’s not look focus on that, rather,
let’s examine the current technical picture.
- NYSE breadth at its highest reading this week, March 17, was still
half of the highest reading back off the July low rally (July 29),
2.62:1 versus 4.08:1. - The put/call ratio is moving down fast and approaching levels that have
been witness to other market tops. Naturally, it is not infallible (what is?),
but it simply illustrates another factor which leads me to believe a top is at
hand. Current reading as of Friday was .729,
look for a hard swing back up as evidence of the top being completed. - The fist pounding by market pundits saying, “Now that Iraq is behind us,
the economy can get on with recovering!” Well, first of all, Iraq is not behind
us. When our troops are clearly in control of Iraq, then it will be behind us. The news from Al Jazeera TV on Sunday
regarding POWs and their inhumane treatment will not sit well. - Sentiment indicators still indicate too much bullishness for a new bull
leg to commence from.
Absent Iraq, though, there is still that nagging thought that just about
everyone who is deemed a so-called market expert seems to forget valuations are
still out of whack, the economy is sputtering, and the war outcome while certain,
remains unclear.
Again, this is my interpretation of the “big” picture and is only
representative of how I am handling my longer-term trades. Luckily,
HVT cares little about all these things,
with the exception of key technical levels.
| Support/Resistance Numbers for S&P and Nasdaq Futures |
|||||||||||||||||||||
|
* Indicates a level that is more significant
Don’t forget, my new book, “How
I’ve Achieved Triple-Digit Returns Day trading…4 Hours A Day” is now
available. Order today and you will receive a 10% discount.
Save 10% on my trading service when you sign up for 3, 6
or a 12 month subscription. Click here for details.
As always, feel free to send me your comments and questions. Tear ’em up
today, I suspect it is going to be a good trading day.
PS: Buy my book, and get a
FREE 2 Week Trial to my Day trading Service.
Click here for more details.