Nice close… once again a fake on the move down out of a potential ending diagonal with a last minute save to get back inside. Here’s a 5 minute SPX chart showing the move since the 23rd and how it’s been 5 pretty clean looking waves up now… The POTENTIAL ending diagonal is in blue. Would not be surprised by a throwover, and note that the 30 and 60 minute stochastics are overbought:
The XLF is interesting today, there’s an outside hammer, a potential reversal indicator that would have to be confirmed by lower prices tomorrow. It is well above its 50 and 200dma’s which look about to make a golden cross as the SPX just did. Volume is trending down overall, though, just like the broader market:
IYR is another interesting one, failing to get over the 50dma, it produced a black hammer on falling volume. I do expect a low volume week with Friday being a holiday. It’s also end of quarter/ end of half which is usually a bullish period – but I wouldn’t be long IYR tonight seeing that, will have to look for confirmation tomorrow:
The VIX made a new low but it also made an inverted hammer that is nearly outside. It did close below the lower Bollinger for the third day in a row, and when it does close back above it will produce a buy signal on the VIX which would be a market sell signal. That could easily happen tomorrow if this inverted hammer confirms with a higher VIX/ lower market tomorrow:
That’s about all the interesting stuff I see tonight, I’m thinking seasonality does not favor any spectacular declines, but a flat to down market this week would be bearish as it would be against seasonality. I’m personally flat and instead of beating my head and account against a wall may go out and enjoy the summer towards the end of the week like the majority of the sheeple. Of course that may be why they are releasing the employment (or lack thereof) data on Thursday.
Have a great evening,
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Options Action: OptionApps Top 5 for 2016-10-26
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