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The S&P stopped right at that trend line on Friday on absolutely NO volume. Could just be a battery charge before we blast off to higher prices, or a sign that we have put in a short term top.
As you can see below, we also stopped about three or four points from the April high that we talked about in last Sunday’s video.
If you look at the charts (I looked at well over 500 this weekend) the tape looks higher, and barring any bad news we are definitely in a position to take out the highs. However, as I have always said, when the charts all look like Picassos, it is then that it can go south in a hurry.
There is a complete absence of dedicated buyers, but there is also a complete absence of any meaningful sellers. It really does look like the entire trading community is on vacation.
I did a blog post on Wednesday discussing the eight day consolidation. I thought something “had to give”, up or down, we did breakout to the upside by about eight points to take us out of that congestion, but it was nothing to really write home about. An S&P close above 1423 is what is important for us now.
1440 is an even bigger resistance level, if you remember, that was the May 2008 high. Amazing to think how far we have really come. We are close.
Some possibly bullish things came out of Europe this weekend and the market is praying for some QE3 in September. I personally feel any more QE is a joke at this point, but the market goes up on certain language as we all know.
The election will really start to play a part in the market’s behavior, and talk of the “fiscal cliff” will really start to grow hair in the weeks and months ahead.
For now though, the bulls (?) are in charge because of any lack of selling. I have some long setups for you to watch this week. They are listed below, but as always, go to the P&L for any changes and entries and stops.
LONGS:
AKRX- 12.40-12.90
CREE- 28.53
MS- 14.82
TFM- 61.10
KEG-8.86
CVLT- 53.80
DIOD- 19.50
FSLR- 22.10
JO – 37.60-38.40
LVS- 42.36
XRTX- 12.75
SHORTS:
TRLG- 21.80
PAY- 32.75-34.18 LEVEL
BIG- 37.59