Today was all about solid earnings announcements from big companies like INTC, JPM, and CSX. Plus, the rumors the Fed will boost inflation expectations to get the consumer spending. Oddly enough, INTC and JPM were both down for the day with the market in rally mode.
This market has to be frustrating the ardent bearish Elliott Wave analyst as they continue to get it wrong or at a minimum have been far too early. Today’s advance really puts a shadow over primary wave 3 down as we have rallied to far and regained too much of the decline from April for this up move to be primary wave 2, at least that’s my take for the time being.
$INDU: Look how much of the decline the DOW has retraced! It’s almost completely reversed it. Is that a primary wave 2? Could be, but I’m not comfortable with that view.
$SPX 60 minute: The market is still trading upward inside a channel and staying at or below the middle channel line, so that seems to be resistance. RSI is over bought and the MACD is close to rolling over. That being said, it’s bullish until it’s not, which for me is a break below the channel.
$SPX Daily: The market pushes through resistance at 1,173. We tested minor resistance and rolled over a little today. Above that and there’s a small gap right below the April peak. However, it still looks like (abc) up and we might be in a larger ABC pattern from the April high. This is my primary view for the time being and the labeling is below. RSI is now over bought but the MACD is drifting higher with price.
IBM: Up once again, however, it’s wildly over bought on the RSI and put in a tail on today's candlestick. I doubt that’s a top, but we are over due for a little corrective behavior in IBM.
JNK: Combined with IBM these two make a great indicator for the market, and JNK continues to support the market higher. Rock solid, I hate it, but rock solid.
$VIX: The index pressed lower and tested the gap but put in a small up day. The index is in No Man’s Land. Will it drop with the market testing April’s highs or will the market roll with a reversal on the $VIX?
$COMPQ: Pops over resistance but it's over bought. No technical damage yet, so anything is viable.
XLF: It broke above the 200 day MA but still looks week and definitely a laggard.
My Watch List
COH: Markets up big and the stock fails to match the momentum. It seems like it’s getting tired at resistance.
FFIV: Moves a little higher on lower volume and spins a Doji. On the 60 minute chart the last couple days look ABC like on the intraday time frame. It’s also consolidating so far at the 50 day MA.
OSIS: Still possibly a little H&S top. Divergences in place but we could get another splash higher. We should know soon.
NEM: Stock continues to bounce back and forth. Could be done or it could push higher. This little range should resolve itself soon.
From My Trading Desk: No trades today. The market and stocks have reached over bought levels and trading the long side on momentum is not my strength. But it’s also not a time to add bearish trades, at least not until the market shows some kind of break down of the current channel on the 60 minute time frame.
J.D. Rosendahl, Rosey