Friday, July 27, 2012

Nemo's Findings for 7/28/12

(Course on chart pattern recognition is available now:  

The week that was: 

  • Remember at the beginning of the month I thought the confluence of  of SPY pivots in the 135 area would serve as a magnet around which the price action would oscillate? Well, so far so good.

  • No surprise, bonds went in the opposite direction of the equities and financials 

  • After Draghi's comments on opening up the spigots in Europe, spy climbed $1.20ish in 15 minutes on Friday. European markets were closed at the time so expect them to be up HUUUUUUUGEEEE Monday when you wake up, if you live in the Western hemisphere that is.  Will it carry over here?  I'm looking for us opening up in the 140ish area...or Vad would say.  If European markets are lower or flat, then all bets are off.

  • Since climbing market usually means risk on IWM led the way finishing just about on the weekly pivot...close enough for government work 
  •  Notice how SPY couldn't hold below the 50 SMA on the was at that point I said in the room the lows were probably  (or not-feel better Vad?) in for the week.  Then on the 25th, they made one more attempt. (o.k., I don't know why the font changed...just going with it.)

The week that is:  

O.K.  looking at the SPY, I expect that confluence down in the 135 area to provide strong support now.  Obviously the monthly pivots change on Wednesday, but the weekly levels have been the strongest along with the moving averages.  Frankly,  I don't think we get near that level next week.  Time to drink the Euro-kool aid, at least for the next week..or not.  

  • Funny thing happened this week, both the 50 day and 200 day moving average are moving north.
  • 141.66-142.21 represent price resistance, and as we can see, between 142.80-143.60, there is a ton of resistance.  Get through that and it's open territory with some minor resistance in the 144.50 area, until almost 147.  A bit extreme perhaps, but a week like we just had puts us in the 145 area. Oh ye of little faith.
  • Bad news was bought, and bought, and bought.  Well, except for FB.  Exception that proves the rule?

The IWM it looks like the bullflag that started the beginning of july is about to break.  The 50 and 200 SMA are so close it's an R-rated chart.  (Would have been X back in the 60' think A Clockwork Orange was rated X back then...sheesh, they'd show that on TV today....almost).  Pay attention to the IWM.  If it's weak, SPY likely won't be running very far without it.  The overall range was so tight, I included the R4 levels on the weekly data.

Now, same with the Qs this week bad news was bought.  We're also coming into the time of year when technology is traditionally bought going into the holiday silly season.  So, no reason to expect the Qs not to join the party.  Big support in the $63 area.  200 SMA and 50 SMA both about to start heading up.

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