Back on 10/16/11 (archived), I posted that despite the short term uncertainties surrounding the
market then, my favorite weekly measures were starting to line up positive, and that such counted
the most in the environment. The weekly chart and indicators remain in positive mode. Check the
SPX and the supporting SPX vs. 200 day m/a. These indicators are not always that helpful in the
very short run, but I will count the market in bullish mode until I start to see signs of a breakdown
in the indicator readings.
The weekly SPX is approaching a moderate overbought against its 40 wk m/a (and the daily against
its 200 day m/a), but since none of the indicators are up in "red zone" territory, the charts shown do
not yet suggest a top is forming for the present upleg.
Both charts show up channels from early Oct. '11, and continue to suggest that there could be another
and perhaps unexpected bout of strong volatility, the narrowness of the channel since mid-Dec. '11
notwithstanding. I would love to wish the potential for disturbing volatility away, but the
"logic" of the charts says "no".
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