Friday's candle closed inside of an existing range, and signals a potential revisit to the lower side. Quite a few Twitterers feel that present conditions warrant an overbought reversal, and should retrenching occur I'd be looking for support around 1065. However, the weekend press feels quite bearish, and short covering adds the power needed to wipe out old resistances.
An aside. The reason I prefer charting the DJI lies in the fact that the larger, lower beta components of the Dow better indicate institutional money flow, in my view. Last Friday's candle on this index closed above two downtrends I have been charting, as well as above the 200 dma. These in addition to its MACD which also made a decisive move off the zero line over the last 3 days of last week.
Returning to the SPX, see the blue boxed MACD making a nice series of increasingly tall bars in the histogram and with a good angle on the signal line when taking out the zero. If the market wants higher, I feel like we need to open at or above Friday's close and put in another full bodied candle or two before back-testing the 1102 level. The confluence of 200 dma and 2 standard deviation Bollinger indicate clear resistance at the 1113-1115 level.
Going back to the Q&D for 5.24.2010 take a look at the DJI weekly. Presently we see a curling under of the MACD on the DJI weekly here, and a weekly close right at the 10430-ish area that marks the top of a developing resistance area. Here again, the angle of incidence on this indicator says time to put in a weekly candle above 10434 with an objective toward 10610 over the next few weeks to months as we put in our next lower high.
Going back to the Q&D for 5.24.2010 take a look at the DJI weekly. Presently we see a curling under of the MACD on the DJI weekly here, and a weekly close right at the 10430-ish area that marks the top of a developing resistance area. Here again, the angle of incidence on this indicator says time to put in a weekly candle above 10434 with an objective toward 10610 over the next few weeks to months as we put in our next lower high.
Many, many stock specific charts have set up with individuals beginning to go off like bottle rockets. For now, I've got the consolidation scanner at the top of the daily checklist, especially favoring those right angled ascending triangles like the one FNSR broke out of last week. Props to @ldrogan and @downtowntrader for picking up on that one just days before it exploded.
Good luck.
