Thursday, January 8, 2009

End of Day, 1/8

Happy I sat on my hands… I would call today not clear or “stuck.”

For the day the DOW closed down 27 points, the S&P was UP .34%, the NDX was UP 1.1%, and the RUT was up 1%.

We’re being held up by support in the S&P 900 area, giving the oscillators time to work. Here’s a chart of the 10 minute SPX, note that we created a sideways flag. This could be a wave 4 move, it’s not clear because it’s a little difficult to count down from the top, but that’s what it looks like and I can count it that way off of the 944 peak. If so, tomorrow will see some down action, but it would have to get through that 900 area first. Note, too, that the stochastic on this timeframe is overbought, so is the 20 minute fast, but the 60 minute slow is still oversold, so there’s mixed signals there.

Next let’s look at the DOW one month daily. There’s a red hammer on lower volume that failed to get through the 50 day moving average. On the DIA chart it’s even more distinct, and on lower volume. The 50dma is also curling up pretty good, that makes it’s support more powerful, and that is now true on all the indices.

The NDX and RUT look pretty strong, but the weak looking one is the XLF. Here we see even volume and a spinner. Not a bullish looking chart. Again, if the entire market is going to sustain a rally, the XLF must go along for the ride.

IYR was weak, finishing down .4% after pinning the 50dma and bouncing. SRS rose on lower volume.

Internals were mostly positive and we produced more new highs on the NDX than new lows. The VIX finished down 1.9%, but is still above 42, and TLT finished sideways/down just a little.

It’s hard for me to be real bearish at this point looking at the charts. It could very well be that yesterday and today was wave ‘b’ of wave ‘c’ and we’re about to head higher, but I still wouldn’t bet on it either way ahead of tomorrow. I think a lot will depend on the employment report in the morning and how it’s perceived. I’ll bet that whatever happens it will make the direction for next week a little more clear, that’s why I’m sitting on my hands for now, the picture is not clear yet, and that’s how I would sum up the day.

BTW, HOG finished up 1.3%, here’s a one month daily. You can see that the 50dma held again here, but it was on lower volume and the stochastic just issued a sell on this time frame: