1040 held, again!

Another day another trip down to the 1040 area.

And then the courtesy bounce.

This is getting a bit too often for my liking. It’s either a sideways consolidation before next move down or a sideways consolidation testing the will of sellers, leading to a bottom that would last us days if not weeks.

I can’t help but think that bears are scared of getting crushed by market masters deploying billions to the bid side of equity futures like July 2009 or February 2010. On the other hand, buyers with big money are busy in the bond market (and PM market), and the rest do not want to risk their own money in a market that has been living and breathing on quantitative easing and nothing more.

This shall not go on forever. Right now, technicals are decidedly negative but bears have been unable to break the level everybody’s watching. On the other hand, market has been trying to set a short term uptrend but bulls have not been able to get traction.

It is, IMO, very dangerous to be biased in situations like this. Let us let gurus and permas prophesize the future of the market from here to eternity. All I care is to be able to latch on the next swing when it comes up or down.

Let’s look at some charts


Weekly chart still look negative. A move above 1070 is needed to perhaps stabilize the technicals back to neutral. A move above 1090 is needed to take the index above MAs and perhaps start a turn in the weekly posture.

This is a daily


Not a whole lot to say that I have not already said. Lots of resistance all the way from 1070 to 1090 to 1100. Bulls need a good push to take 1070 and hold it, and that would be just a first step in the right direction.

Notice that the much touted 200 MA is turning over into a negative slope – just an observation.

Daily volume expanded. Daily breadth was positive

S&P’s McClellan Oscillator looks like it is trying to work a bottom


The setup for a run is there. Will bulls use it or will they remain content with limp bounces off 1040?

The same way, index faces a lot of resistance on the way up, breadth needs a lot of work to improve and correct the damages


This is a 60-min chart


Seems like index is in a short term box, or range. Some of the long-time reader may remember that we have had very good success with box (range) projections, especially with NDX. Anyways, I have calculated box projections and they are on the chart. Needless to say that it's all theoretical.

An upside breakout of the range should exceed the gap of August 24 and hold it

OEW pivot support is at 1041 and 1032. Pivot resistance at 1058 and 1090.

Long term trend is up. Mid-term trend is up (seriously threatened and in need of rescue). Short term trend is kind of sideways.

Have a Nice Evening!