Coolhand's Market Analysis

We'll, the EU Summit has now come and gone and the market seemingly cheered the results.



Of course, we were oversold in a big way yesterday, so it wasn't any particular surprise to see a snap-back rally. In last night's blog we saw TRIN at a very high level, which more often than not is a precursor to an imminent rally.

So is the market happy with the EU Summit results, or did the market simply respond to an oversold condition? Next week is OPEX and that may be playing a factor too as the Options gods set the table for next week's action.

Here's how we look at the end of the week:



Back to buys for NAMO and NYMO.



NAHL rose and remained in a buy condition, while NYHL actually dipped, flipping to a sell.



TRIN snapped back into a buy condition after yesterday's extreme high reading. It suggests a moderately overbought market now. TRINQ is also back on a buy, but is modestly bullish. Taken together, these two readings aren't saying all that much, so take the buy signals at face value.



BPCOMPQ turned back up today and remains in a buy condition. It is also hitting that upper bollinger band, which usually indicates a market that is getting overbought in the intermediate term, but given seasonality I'd not read too much into it at this time.

So the signals are mixed, but bullish overall. Still, the Seven Sentinels remain in a sell condition. If NYMO can tag a fresh 28 day trading high in the next few days the system will officially flip to a buy (as a result of three unconfirmed buy signals the past 2 weeks).

I can't be bearish here. We got the shot lower I was looking for, but I refrained from buying the one-day dip until the EU Summit results were behind us. For the week the S&P 500 was up about 1%, which is a good gain, but one had to endure a lot of uncertainty and volatility to get it. The three unconfirmed buy signals loom large in my opinion and are very suggestive of a market poised to move higher in the days ahead. And given next week is Options Expiration we can probably expect continued volatility, but I'm not looking for any serious selling pressure for the week. I think we're more likely to chop our way higher.

I'll be traveling on Sunday, so I plan to post the Tracker Charts Saturday evening vice Sunday. See you then.