Well don't we have crazy trading these days? Anyways I was watching inthemoneystocks research, and they pointed out something rather funny. On the SPY, if you note the major resistance band between 109.6 and 110.4, for the past two trading weeks starting two weeks ago on the Monday (and referring to the chart), you'll notice that the market gapped up above the major resistance on Monday (day 1). On day 2 and day 3, the market meandered around the highs of day 1 but never really making much gains (eg. no confirmation of the upmove on day 1). Then on day 4, the market collapses below the major resistance band, and stays below on day 5. The cycle continued again next week, and today Tuesday December 1, marked day 1 of the five day cycle, and the market gapped up. If this continues (not that it necessarily will), then day 2 and day 3 (Wednesday, Thursday) will be pause days, and day 4 (Friday) should see a major gap down. Friday also happens to be US employment numbers. What the numbers are don't particularly matter, because as I noted before, the market can act opposite to what the news should rationally dictate.
So perhaps we have not so crappy jobs numbers, and yet the market will find an excuse to pummel stocks. Or we have very crappy jobs numbers, and the market will be excited and bullishly drive the market to new highs... personally if I have to bet, I'll bet on the former scenario.
if the market wanted to go higher, then we should have had more impressive weekly closes. For the last two weeks, it looks more like it's topping, then consolidation.
No comments:
Post a Comment