The financial media has been forecasting a bearish move in stocks for weeks. Yet, futures are pointing to an aggressive and bullish follow-through. Stocks might actually rally today, ending their dire script for another week.
SPY is bullish in early trading 284.57, and firmly above major October, November resistance levels. With the recent highs at 285.18 next on the agenda, we’ll look at why market pundits got it wrong while reminding members what was discussed in the weekend video newsletter.
New Highs vs. New Lows NYHL
We remain consistent. We focused on stocks and their price action while dispensing with our opinion. More importantly, we postulated if the number of stocks making new highs
Stocks making new highs did not disappoint.
We also wanted to monitor NYAD. If the cumulative line comparing advancing stocks to declining stocks followed through we would remain bullish.
Advancing stocks outperformed, confirming bullish positioning.
NYHL and NYAD are both based on price or the auction between buyers and sellers. If these two are rising, breadth should be bullish.
Recall the weekend video. We discussed the cycle in both NYMO and NAMO were beginning to bottom, as both crossed zero. The moving average for both has begun a bullish turn. Our bias should be bullish.
Wilshire 5000 – The Broad Market
Recall the discussion this weekend with reference to the Wilshire 5000. The cycle remains bullish as this measure of market participation moves higher.
At a minimum, the short term Rate of Change (RoC) oscillator would need to slow down. If it did, the cumulative difference between them would affect the slope. It’s two RoC lines would change its angle. There is no change, therefore we remain bullish.
Markets don’t go straight up nor do they go straight down. Markets go up and down along a path of least resistance. Since December, that path has been bullish. Following the recent 20% gains, we monitored for consolidation. Instead of pulling back, the markets consolidated in time.
Join us today in the trading room for our LIVESTREAM broadcast during market hours, as we trade the watchlist and other new positions. Watch, listen and trade from 9:20 AM to 4:15 PM Monday through Friday.
Happy Trading,
Vinny
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Live Sessions
Live broadcasts are educational in their content. Proper risk management is considered on every trade or asset mentioned.
*** Stocks highlighted are for information purposes only and should not be considered as advice to purchase or to sell mentioned securities.
As always, the use of technical and fundamental analysis is encouraged in order to fine tune entry and exit points to average seasonal trends.
These mentions are stocks that we may or may not decide to trade as outlined in the watchlist. Always use a stop.