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Coolhand's Market Analysis

No Sign of Weakness

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I have to hand it to the bears. They sure know how to light off a big rally. By shorting this market en mass, they helped the broader market log the seventh gain in nine days, which has seen the S&P 500 move from an intraday low of 1075 early last week to today's closing level of 1224.58.

How much should one save?-polar-bear-jpg

Not even a Fitch downgrade of Spain today could dampen the bulls party as the major bourses in Europe enjoyed significant gains as well. What does that tell you about the strength of this move?

We did get some economic news today. September retail sales were up 1.1%, while sales less autos rose 0.6%. Those numbers were about twice what economists had expected.

Here's today's charts:

How much should one save?-namo-nymo-jpg

NAMO and NYMO are both reflecting the strength this market has had. I would think we'd get some consolidation soon, but I suspect the downside is going to be limited as long the bears continue to short this market with both hands.

How much should one save?-nahl-nyhl-jpg

NAHL and NYHL ebbed a bit higher today and remain on buys.

How much should one save?-trin-trinq-jpg

TRIN and TRINQ also remain on buys and suggest a mildly bullish stance.

How much should one save?-bpcompq-png

BPCOMPQ is taking off to the upside. This signal also suggests higher prices in the days ahead.

So all signals remain on buys, which keeps the system in a buy condition.

I had mentioned the other day that if shorting didn't abate it could be watch out above. And that's what appears to be happening. Sentiment is largely supporting this rally. And we're slicing through resistance without too much trouble. I really don't get the impression this run is over, but I do think the bulk of the gains are behind us. But that doesn't necessarily mean that any further gains would be insignificant, because we could potentially make it to 1300 on the S&P 500, although that would be a best case scenario in my book. And I doubt we get there quickly at this point, should we make it at all. The easy money has probably already been made. Of course I use the term "easy" loosely.

But again, sentiment appears to be key to what happens moving forward. If the bears begin to capitulate, that could be a signal we are topping.

Stop by Sunday evening and I'll have the tracker charts posted. See you then.

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Comments

  1. bmneveu's Avatar
    Your charts and analysis make me feel a little better about my decision to stay in over the weekend. Thanks Coolhand
  2. WorkFE's Avatar
    I look for next week to some what mirror this week but without the TNT. Up but not over the top.
    The top ten for the month sure is impressive and it's only the 15th. You gotta take a little risk to join that group. The trick is not giving it back.
    Thanks CH. Now if we can just squeeze out another 5% this month I would feel good going into NOV.
  3. Efire's Avatar
    Not to worry. Weakness will come in the next couple of weeks. Chance to get in before the rise to Christmas.
    Keep up the good work, CH.
    I too still in F fund, didn't get in last week. Watch for another roller coaster ride coming.
    http://www.mmacycles.com/weekly-prev...ober-17,-2011/
  4. TSPIntel's Avatar
    I Love ALL Your Analysis and Charts Posted. Thank You for sharing them with us. I Appreciated.

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