Dec 1, 2012

Weekly review

Short term view - pullback of a bigger degree for 3 to 5 days.
Intermediate term view - in the middle of a intermediate term move higher. I expect another 3-4 weeks higher.

Last week I was expecting 2-3 days weakness with support levels 1380 and 1390 than higher highs... we saw two and a half days weakness and move lower to 1385 than higher so nothing "shocking" here:)

Nothing has changed really since last week... I have just updated the charts. I think we saw the first wave higher or we will see the final high on Monday. Next week a pullback of a bigger degree for 3-5 days should begin. The support levels which I will watch are 1375-1380 and 1390. This should be another buying opportunity and another wave higher should follow.
The alternate scenario stays the same(shown with red on the charts) - the move higher is over the next big wave lower marking 4-year low will begin soon.

Short term - it is difficult to say if we saw the high for this wave or there is one more push higher to resistance ~1425. We will know better on Monday. But I see resistance and divergence on the MACD so any move higher is take profits event. After that a pullback should begin.
Intermediate term - nothing has changed. The SP500 is struggling with the broken trend line, resistance and MA50, there is hammer on the weekly chart so I expect a pullback.

The Market Breadth Indicators issued buy signal confirming a new move, but we knew that already:)
McClellan Oscillator - shows strength hovering around 50.
McClellan Summation Index - issued buy signal.
Weekly Stochastic of the Summation Index - issued buy signal last week.
Bullish Percentage - issued buy signal. Should reach at least 70 before the move is over.
Percent of Stocks above MA50 - is moving higher which is bullish
Fear Indicator VXO - is moving higher which makes me think that the next move is lower.

No change here too. The two counts are still intact.

Tom Demark SEQUENTIAL AND COUNTDOWN - this technique spots areas of exhaustion.
Sell setup finished on Friday - some weakness is expected.

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