Friday, July 12, 2013

Nemo's Findings 7/14/2013

(Course on chart pattern recognition is available now: 

Loook!!  It's a, it's a plane!!!  No, it's Su.........

                                                        .........the Bennienator!!! 

What more can be said. A couple of weeks ago  Buh, Buh, Bennie and the Fedmongers  (think Elton John) reiterated that purchases will go on as long as necessary and that rates will stay low even longer.  Psssssst!  Anybody tell the bond market?  This week, after the Fed minutes from LAST month's meetings were released Bennie reiterated the same stating that the labor market was fairly weak....and the market gapped huge.  Notice the markets didn't care about shrinking imports in China or Portugal's borrowing costs skyrocketing, or the progressing Italian implosion.

In these Summer low volume markets, they just continued to grind higher.  Also, the Qs which are coming into what was their traditional buying season before this whole financial melt-down thingy started in early 2007, are showing their old form moving higher in the Summer. Your Naz stocks would be traditionally bought around this time of year, and then sold after Xmas.

Here's a question that may only interest me.  Since we are in the Summer, many traders are out of town for the Summer,  we know that the majority of trading is done by HFT.  We know that HFT are programmed to take advantage of our humanity (which may not be accurate in my case, but I digress), therefore, they are primarily designed to search for order flow and to work against what our normal reactions would be.  Therefore,  we are likely to see price action move further in a direction than normal in an attempt to thwart what would be normal, human trading reactions.  Which makes me think this market could continue going higher for quite awhile.   Hey Nemo...where's the question? ..meh....minor detail

Looking at the dailies of various indexes they look like they might weaken a bit for now, but nothing is screaming pullback.  Having said that, take a look at the daily indexes from the swing low.  Long time observers of the market haven't seen a stretch with so many gaps and doji's.  

80%+ of the gains made in this stretch have been in the overnight future's markets, where it's cheapest to push the market around. 

Anyway, earnings really start to get rolling next week, so we'll get a better idea of how the earnings news will affect the market.  The reaction is all that matters. If this gap and grind action continues in the indexes, individual stocks reacting to earnings will likely provide the best plays...just opinion of course

Anyway, the week that was:

Notice all the gaps shaded in blue.  I missed that one in FAS.  Pretty impressive. 

The week that is: