Tuesday Outlook: A Predictable, Entertaining Market

Markets are becoming predictable, but still entertaining, especially if you’re a spectator. If you have some TARP money sitting on your trading desk with volume this light you can really push things around.

I know, I know, many think the government (the PPT?) is in there buying. This and the previous administration are the most interventionist and scripted I’ve ever seen. But there’s no evidence this is occurring and they’ll never admit to it anyway. That leaves us with all that liquidity sloshing around trading desks needing to play games and/or keep things propped.




Again, courtesy of Decision Point is the chart below containing the McClellan Summation Index which basically accumulates market breadth (advance/decline). With a reading over 1,000, it reflects conditions as “much overbought”.



























The internal daily chart below is annotated by DeMark and RSI indicators for QQQQ. Here you can see a 9 count for DeMark and an RSI > 70 meaning short-term oversold. You can see the reaction from the previous DeMark 9 combined with an RSI > 70 in early May. Remember, these are just short-term indications that can help you time your positions more profitably.






































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Comments

[y1531y]

It is not clear that SPY has a inverted Head and Shoulder.

Dollar has a Double Top? Or it may go up forming right shoulder to complete a Head and Shoudler, then going down to test the old low as inflation coming back.

2009 Jun 09 09:13 AM

[TraderRob]

The US Dollar is in the hands of Treasury yields and Fed buying policy in the short term. The Dollar has felt pain due to long term yields popping, but will really take a hit if the recovery story turns sour. Foreign investment in U.S. equities has maintained demand for the currency. We'll have to wait and see how the economic side of the commodity equation ends up once the speculative plays fade. Perhaps crude at 70 bucks isn't so bullish after all???

2009 Jun 09 11:35 AM

[Shonkypom]

The distant roar of inflation's tidal wave is building. The only place to be when it hits is in stocks; only companies have the ability to quickly divert inflated earnings to their bottom lines and into shareholders pockets. Doesn't matter how may techical patterns appear on charts, the only thing that will drive the numbers up is increased earnings. Buy some before the future eats todays dollars.

2009 Jun 09 10:48 PM