It was quite a battle today. Despite what looked like relatively quite trading for most of the day the bulls and bears were smashing it out something fierce before the bulls finally powered ahead in the last hour of trading.  Looking at the intra day chart, the QQQQ looks much like a spring board as each time it tried to break higher, it was smacked back into place only to try again and again. The conventional rule in technical analysis is that the more often a level is tested the more likely it will not hold. That turned out to be the case as the bulls finally pushed through and closed the indices near the highs of the day. 

 A look at the major sectors shows the same battle with the bears putting forth an effort in gold and oil and the bulls attempting to lift technology. Breadth ran positive all day which bodes well; however, volume wasn’t all that strong. All the major indices are pushing through strong resistance, the S&P at 1240, the Nasdaq over 2200 and the Dow knocking out 10,700. It only makes sense that these levels now make up the front lines of this battle, and just because we break through we can’t let down our guards. 

The action this week has been quite positive as early we saw the pullback we were hoping for in order to strike fear in the eyes of participants. Now the question is; did we gain enough rest in order to have the energy to take us higher? What is concerning to us today, is that many potential breakouts or good charts don’t seem to have good volume which acts as fuel for a stocks move. We’re using this signal as an opportunity to lock in some profits and adopt a wait and see attitude. There is no question the market feels a bit hot and we hope the bulls are deploying all their capital at these levels. More will definitely be needed to finish the year out strong.

We continue to be optimistic about this market; however, it would simply be foolish to attempt a prediction of where we go from here. We will let the market decide and act accordingly.

Thank you for all the TSP comments we have gotten, they are quite helpful and we’ll try and work in some of the special requests you have.

Have a good evening 

RevShark