My favorite daily, weekly and monthly price charts closed out 2012 flat neutral, leaving
the early weeks of 2013 to signal direction. The charts basically the future a well guarded
secret. I mentioned recently that the technical side of the market might be of limited utility
in view of investor and trader pre-occupation with the fiscal cliff show and other very
short term fundamentals. With today's boffo strong opening for the year, it may be the case
that very short term senitment or emotion may dominate for a bit, as resolution of the
cliff issues have twists and turns ahead. Moreover, the initial move on taxes is a net negative
for the economy as it will reduce take home pay for most US workers owing to the shifting
of the payroll tax from 4.2% to 6.2% -- a 2% hit to income for the many around $50K.
Today's glee could see a more sober view out ahead.
The selloff in the SPX going into the end of the year reduced the angle of ascent for the rally
in place since mid - Nov. Today's spike took the SPX to a short term over - extended point
and to enough of a premium to the 25 day m/a to invite fast money profit taking. SPX Daily
The trend band off the Nov. interim low is wide enough to allow elevated volatility.
The red horizontal line on the chart shows the cyclical high to date for the SPX, and the green
HZL line shows 5 year resistance at 1400. It is good that the SPX is spending more time above
long term resistance and it would also be nice if the SPX can take out the prior cyclical highs
in that 1460 - 1465 bracket.
No comments:
Post a Comment