The markets need a rest

Thursday another record day on the Dow and green close across the broader markets.
However, volume was waning today and came in lighter than yesterday on the NYSE and Nasdaq. Giving us a rise on light volume, a sign of lack of conviction for a market the needs a rest. I said earlier in the week we should be volatile and that we’ve traveled far in a short period of time. The bulls have done a great job amidst lower energy prices, good earnings and economic data. However, everything must rest and find a breath at the high altitude. So unless we are getting oxygen delivered to Miss Market, she needs to find some fresh not so thin air.

Crude closed at new lows on the year down $2.50 at $56.26. Crude was as high as $59.30 on the day until it started its mid day fall. Gold closed down $2.10 at $621.70.

I’m seeing more divergence creep in on the daily charts and again tonight we see shooting stars. Showing we closed mid range, but still green. The bulls are here but rising on light volume is not going to keep this momentum going. Five consecutive up days and leading into options expiration things should be watched for an early pullback. Some profit taking and position settling could take place. Then a quiet day may set in. There is no reason to get in a hurry to do much or go far on Friday of expiration. All the work has been done before today, so it is just details now. New positioning and thinking can be done on Monday.

Some earnings for the Week of November 13 — 17: Friday pre market — ANN, KIRK,

Economic due for the Week of November 13 — 17: Friday 08:30 Housing Starts, 08:30 Building Permits.

ES (S&P 500 e-mini) Friday’s pivot is 1405, weekly pivot is 1382. Thursday’s small range is keeping us tight, we still have some room on the upper bollinger, however we are extended and some divergence is creeping in here. So look for an early pullback and through the neckline on the 5 minute head and shoulders (1403.75) should be watched for a move lower near the 1399.50. Intra day Support: 1403.75, 1401.50, 1399.50 and 1397. Resistance: 1405, 1408, 1411 and 1413.75. 60 minute and 5 minute chart is below.

Good trading to everyone and have a fabulous weekend.

Teresa Appleton has traded equities and options for
nine years and futures for seven. She is founder and CEO of TradeLogic, LLC. For
more information about Teresa and the training she offers stock, options and
futures traders,

click here.