Coolhand's Market Analysis

In my last blog, I said I was neutral heading into the new week and thought that volatility might become a bit more prevalent after the previous week's wild action. It might not have been a particularly volatile week, but it was neutral as the EFA was virtually unchanged, the DWCPF was moderately lower and the S&P 500 posted a modest gain.



Volume was way up on Friday, but it was options expiration, so it's not unusual in that context. Momentum is still struggling, but price is holding up pretty well and is not far from its all-time high.



The DWCPF saw price close out the week back below a key area of resistance, but price is also above its previous low and its 50 dma, so technically it's not in bad shape at all. Momentum is still drifting lower.



The EFA bounced on Friday and that kept the index from posting a weekly loss. The chart still looks decidedly bullish, but the action has gone flat over the intermediate term. Momentum has yet to turn back up.

I am leaning bullish heading into next week. Price has been resilient overall, which is not surprising given that breadth remains bullish in the intermediate term and liquidity is still well into expansion territory. NAAIM remains darn bullish too and that should be viewed as bullish for the bulls. The options are neutral for Monday. This is not a market that I'd make big downside bets on, so bears beware.