Past Week:
We have had our second week in a row lower but we are still in a very bullish run here. Our lowest pullback has tested that 20 week moving average, it looks like our current 20 week average and price might converge sometime this week around the 1000 mark on the SPX if we do not rally from here.
On our 30 minute daily for the week:
Monday and Tuesday it looked like the correction was over, only to see Wednesday start off with a large selloff and then a grind back to green then back to red with a nice green bar at the end. Thursday morning we sent some research to our members indicating that most likely the selling was not over and that we had further to correct. Thursday was a trend down day which we watched develop on the charts all day in the trading room. Friday was our employment gap down where we climbed back all day long not quite closing in the green but still off the lows.
Looking at the Russell 1000 and 2000 - 250 day New Highs these continue to deteriorate and the Russell 1000 turned from sell to neutral. To become bullish we need to see these return to piling on some more new 52 week highs.
This is a rework of our pct pull back chart on the SPX combined with the number of stocks in the RUT 3000 that are effectively above their 40 day moving average. For the 3rd time since March, the SPX has moved below the 40 DMA and our bull/bear indicator currently sits at that 42% level. To become short term bullish we would need to see this indicator begin to point up and a confirmation would occur when we cross back up over the 42 bar moving average.
These indicators can improve quite rapidly so I reserve the right to become short term bullish intraday. We are at levels where we have corrected from in the past and if you are willing to hold for longer periods should prove to be good entry points. I believe that new highs are ahead of us based on the overwhelming bullish sentiment that has driven this market up. This type of sentiment takes time to dismantle and if history proves a blueprint for the future we should begin to make new highs on weaker sentiment and technicals. We need some confirmation and are watching for it in the price action, 52 week new highs, our 10 day hilo indicator, the 40 day moving average indicator as well as our Zweigs.
I remain neutral on the the short term 1-5 days until we see either further weakening or strengthening but bullish in the 5-20 day time frame as well as long term.
While our weekly outlook is good for getting you started, daily updates and intraday updates for our members are what makes the money, particularly in market turns. If you are interested in finding out more about our trading group and perhaps joining us give a visit to our website: http://TTTHedge.com to find out more about us and our services.
See you in the Markets..
Marlin aka: redliontrader
