Saturday, December 8, 2012

Showing some strength


Although I am still very cautious here, the market (DJIA at least) is showing some signs of strength.  The RumWave chart is also showing some resiliency so I'm not turning on the "red light."   However, that doesn't mean that I want to start new positions here.  If I was still in a bullish trade, I'd stay in it, but I'm not.

According to the 2012 Congressional recess schedule, Congress plans to recess on 15 Dec.  I'm sure that they will extend if a deal hasn't been made, but I haven't heard anyone talking about it yet.  Political theater anyone?

Here are the daily scores.. they are pretty high now and still climbing:

I thought it might be interesting to take a step back and look at the forest for a minute.  Above is a chart of the Wilshire 5000, weekly view.  I'm a big believer in "don't outsmart your common sense."  I'm pretty sure a 4th grader could look at this pattern and suggest what will likely happen for the next few candlesticks.

 Above is the DJIA 4 hour chart.  The Dow broke out of the bearish divergence trend.

Above is a daily chart of the DJIA.  With the Heikin Ashi candles we can see a higher high on the most recent candle wick.  That indicates strength.

 The SPX has not been as strong.  Above is a SPX 4 hr chart.  The slow stochastic is still in a downtrend, but it is on the verge of getting out of it.

So, the bottom line is that I don't have a good foundation to go short or go long.  That may change next week, but we are in a very news sensitive period.  I'm happy to sit on the sidelines for a bit.


401k Gameplan:  Safety

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