Stock Index Futures:
Another green week in the indices which I don’t think is really surprising anyone. As I mentioned when it was happening, the range expansion in mid-October really kicked off this parabolic rally and it hasn’t let up at all. Just look at the weekly chart, sure it is overbought but the daily chart isn’t. The psychology behind this market gets more bullish and complacent every day, people denying bubbles and fed officials talking about permanent QE. Any and all bearish indications are being trampled every time they show up like they don’t even exist. If you haven’t already you should really take a look at the short post I made about the corrections getting smaller and smaller which in turn is turning into a parabolic madness. Anyway, nothing has really changed here since last week. Watch the RSI’s, daily 20 EMA, weekly chart previous low to hold, and market internals. Be disciplined in your individual stock trends and use your stops.
Crude Oil:
The important $93 level I mentioned last week ended up holding and price is now trying to get back above $95 with a semi good looking base kind of thing. $95 got rejected just a bit but mostly recovered so that is good for bulls, and that will be the level to watch next week along with the 20 EMA. Weekly chart put in another accumulation bar so that is a positive for bulls as well. If it starts to fail again that $93 level will be the one to watch and as usual there are three support levels under $93 as well as weekly trend support so be aware of that. If $95 breaks then $97.5 is what I will be watching. Keep in mind it is a short week upcoming for Thanksgiving, basically three days to trade. That is what I am paying attention to though.
Euro Currency:
Trend support is doing a great job of holding up during the past two weeks as well as the daily key levels. 1.3500 needs to hold for more upside next week and if it fails then it is back to watching the trend support levels as well as 1.3400. If it does hold with some good structure 1.3700 is likely to be tested again but that steep drop may pose a problem and force more consolidation if it does want to head higher. Weekly chart is looking good as it is above all trend support levels with RSI in positive territory. It looks especially good if you are looking at it from this point of view. In the big picture that weekly chart has some really great bullish structure so that has me bullish in the long term especially with the dollar being in such a strong long term downtrend.
Market Internals:
These are the new internals that I will be following, I am making the change because 1) the percent of stocks above 200 SMA is now only looking at S&P-500 stocks rather than all the NYSE and 2) I like how they look better. Anyway, I wrote a small post about the first two internals earlier in the week. VIX being in the biggest squeeze is has been in in years and the percent of stocks above 200 SMA looking at a critical inflection point that needs to resolve soon. Looking at those two are the most important in my opinion for the health of the market, specifically the S&P. The third (McClellan Oscillator) is also coiling up but that is better to follow for overbought/oversold and right now it is neither. In fact it is dead flat, but I am guessing it has some upside to fill in just by looking at that wedge as well as the McClellan Summation (sum of oscillator) being in the positive.
Economic Releases:
Short week next week, I will likely only trade through Wednesday. But I am expecting some nice trading those first three days since we have a good amount of news to digest in just three days. Happy Thanksgiving everyone!
From here on out I am likely just going to cover the S&P, Crude, and Euro in these recaps because those are the only markets I am trading for now because my goals render that decision.
Trade well,
-Michael
