Saturday, February 2, 2013

Nemo's findings week of 02/032013

(Course on chart pattern recognition is available now: 

The week that was:

Very strong Capex, bad housing (was that just the fiscal cliff stuff?)  and we had  a relatively flat day with only IWM up a bit, and TLT down (as the relationship usually functions).  CAT was light on revenues and VMW reported poorly after the closing bell, while YHOO reported strongly.  We'll see what Tuesday brings.

O.K so, Shiller housing index came in strong, and consumer confidence not so strong.  Finnies test the highs for the year, the SPY continues upward, and IWM meanders under it's yearly high.  After hours AMZN misses....not to worry, it hasn't shown an operational profit in it's corporate existence, but it more than retraced all it's losses from the day.  THAT, is what you call a bull market.

 I guess contracting GDP was just the excuse the market needed to sell off.  We'll probably see more for awhile...this has been a pretty good run.  I didn't demarcate it, but IWM bottomed $.03 below S4.  Notice how all these markets basically bottomed/topped at the same time late in the afternoon?  You'll see that often.  You have confluence of timeframes and trading styles within a stock, and you have confluence of significant levels at the same time across these stocks...coincidence?


 On Friday, we had what was perceived to be as positive economic news, so we bolted higher.  Again, notice how well the levels behave.  I also track daily R4 levels.  They happen less than 10% of the time, but that means that happen twice a month.  Now, I catch some shit from the great-unwashed (old intelligence term) about tracking semesterly and yearly pivots, even quarterlies.  Of course, in the shorter term the daily, weekly, and monthly levels (in descending order) bear more relevance in the shorter time-frame.  However, I have found that one must observe when different levels become relevant and for how long they stay relevant.  You'll be amazed at how long a seemingly obscure level can remain relevant.  The key is to pay attention.  So, without further adieu, here are the levels for next week:

On another note, a good friend of mine who trades bonds and currency say volume is coming in to defend the current lows.  If they hold and go higher,  the market will be taking a tumble.  If they drop,   the markets will probably be going higher.   Pay attention.