As we have been in the consilidation face all previous week, there is nothing new happening in the market right now. I still believe we will be slowly grinding higher with the occasional pullbacks.
The main levels to look at are 1150 and 20-day SMA. We might get some rise at the beginning of the week, as fund managers will be doing their usual end-of-month window dressing (buying best stocks, selling worst)
Stock market is looking tired here. I am seeing that some sectors are ready for a pullback (mining, financils, tech).
Now is a good place to establish shorts at 1160 with the stop at 1163. Target 1150 by Monday.
The index might reverse down to 1140-1130 during the next week. That would be a nice area to establish long positions. A drop below 1130 would make me very cautious if I were holding longs.
Despite all the sceptincs there is still up room to go for this stock market. The current rise won’t stop until someone who is propping it up will stop doing this. The past week was inline with my analysis. We have got a small reversal in the nightsession on Monday on ES, then continued sideways-higher all week.
The next week is Option Expiration week. Looking for some consolidation in 1160-1140 area. After that another push higher going into April. The major support is now at 1130, so until this one is taken out, the bullish case is alive and well.
EUR/USD is also stuck in the channel. It is finally braking out from the 1.3750-1.3450 zone, where we have been stuck for a month. I would be looking for a small pullback here at the beginning of the week. Then another push into 1.39, maybe 1.40.
Longer term charts suggest that the possible target for this coming reversal is 1.42, after that we will move back down. Though, this is just a pure speculation at this point.
Market is in consolidation mode as projected. Compare the current price action with the one which took place 3 years ago.
After a consolidation (the like we are witnessing today), the market continued higher, even though the indicators suggested it was way overbought.
Today was a slow day, as expected. No major news and sideways price action.
In fact some of the stocks I mentioned last week have pulled back a little, and have reached target levels:
ZMH – start accumulating at 59.30-59.70. Stop at 58.20. Target 65.00. 1/5 Risk/Reward.
RINO – has pulled back more than 4%, but has already managed to get into positive territory. Expecting a 50% rise by May.
CHK – buy now at 25.00-25.50. It is a save pick unless it trades below 24.00.
ADY – been burned in this one, but I believe it deserves a second chance. Right now it is stuck between 22 and 21. My strategy would be to buy 1/2 at the current level with the stop below 21. Add to the position when we breakout above 22. Looking for a gap close at 24.
Short term view on the market. Areas to watch closely – 1130 and 1115. Expecting to see some pullback next wee, but not more than 1-2% from Friday close. Then a rise further continues. I would personally like to see some base building before we approach 1150. 
This is a longer term chart for SPX going back to August 2006. Look how the both circled areas look alike. If we use comparison analysis, we should get to 1200 by April Options Expiration. Then some sideways action is possible, as there is a ton of resistance above 1200 area. Though we might get as high as 1230-1250. I am really clueless, what happens next, maybe “sell in May and go away” will be the thing to do this year. We will see.
For the time being I am bullish on the market, unless we sell off below 1105/1085 in the next 2 weeks. If that happens, I will reevaluate my longer term view.
All resistance has been broken, the market is continuing higher and my puts have lost half of their value overnight. In other wirds, business as usual.
As I have stated before, today is a break or make day – it will determine the direction for the coming months. And this direction is pointing higher. Maybe we will get some retracement going into next week (I hope we will) but I am not shorting, but just waiting for the long setups.
Here are some potential plays:
CHK – buy 25-26. target 35 by april opex
CALM – buy at 32-33, target 40-42 by april opex
ZMH – buy at 58-60, target 52-week highs.
AIG – buy 27-28, target 33 next week
RINO – pullback to 22. buy. target 27
Use 3% stop loss.
Compare the following two charts from the past and the future. It will be interesting to see whether History repeats itself or not.
The chart from December 2007.
The recent price action.
Tomorrow the Nonfarm Numbers will be announced. I have no idea, whether we will sell off, or gap up higher (I would liek to see gap down and then gap close and beyond). Though I am betting we will close lower this time next week.
Bailed out of my GS puts for a loss, switched to longs, closed those for a small profit. Bough AAPL puts for a gamble.
EUR/USD is looking interesting here. If the area at 1.3450-13550 holds today, I expect to see 1.38 and then 1.40 in a couple of weeks. Right now it looks like a Wyckoff Formation in the making. MACD divergence also confirms this theory.
Markets kept going up slowly during yesterday’s trading session. We are now right below the resistance. should a breakout occur on Tuesday, we are going to 1130.
If there is now breakout today, I would be looking for a pullback to 1105. After that it’s anyone’s guess, what will happen next – a break up to 1130 and possibility of 1150, or a breakdown to 1080-1085.
Here is also a Volume-Weighted Average Price (VWAP) chart below. It suggest that there is a lot of Vacuum in the 15 pt. range right above us. So, should the move up happen, it will be FAST.
Still holding my GS puts, as the stock remains under severe pressure.
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