Do You Recognize The Difference?

Real Strength and Real Weakness. 

In Humans  , sometimes strength & weakness can  show up as obvious,  seen by outward appearance alone.  In some cases, however, it may require an X-Ray  to peer inside and see how the internals are doing.  Its really the same with the markets. A Rally can appear strong,  and yet inside it may show evidence of weakness , and visa-versa can be  true too.

I know many felt that the year end ‘Santa Rally ‘ ,  as it is often called at the end of the year,  looked like a strong continuation of the rallies  that we are used to seeing lately.  Here at Chartfreak, I was mentioning to my premium readers that under the microscope, the rally looked to be weakening to me.  I thought that we might actually see some rolling over and possibly even some selling into 2015.  For how long? We will know soon enough, but notice what I was pointing out to my subs last week.


THE SPX was falling short in some of its ‘internals’-  It looked weak to me as it was breaking out.  I thought it might actually  roll over after breaking to new highs,   like it did in September.

SPX dec 28

SPY NOW  ( Broke with weakness & fell back)

SPY Jan 2


To me the QQQ looked even weaker…



I posted this chart of the QQQ, it didnt look like it would even make new highs , like it had in the past after a sell off.


QQQ Dec 30




Here is the QQQ at the close of Wednesday ,  it never did make it to new highs , and today it is down again.



This chart of the SPX was also important to take note of before getting too bullish for long positions right now.



 So is this just a quick dip ?  A buying opportunity where  the markets will recover and rally soon?  Recover and rally Later?  What should we look for going forward?  There are many clues along the way ,  here is 1  piece of the puzzle.



I usually do a weekend report to summarize what happened during the trading week,  and what to look for going forward too.  I plan on covering the Dow, SPX, QQQ, IWM, RUT, $USD, $WTIC, $GOLD $SILVER GDX GDXJ .   That  report will be found by Monday morning the latest under the ‘strategies ‘ tab for premium subscribers.   If you  sign up for a 1 month subscription @ $37.95,  you’ll get all of the weekend and weekday reports to be published in January , as well as past reports under the strategies tab. There are discounted quarterly and yrly memberships found here too.


  Like I said,  sometimes strength and weakness is obvious looking at a glance, but at other times it takes an X-Ray…a deeper look at the internals to see if we can identify real signs of strength or real signs of weakness. Thanks for stopping by and I do post here from time to time , so if you cant sign up for a membership, then please feel free to sign up for our free email alerts and you’ll be notified every time I post under this ‘blog’ tab for the public posts too.   Again, I appreciate your taking the time to check things out here at,  have a great weekend!


2 replies
  1. Michael-K
    Michael-K says:

    Alex, nice work, as always. I’d like to suggest a minor tweak to your charts that might smooth things out for some of your readers. When you post a chart that is not current to the time of posting (e.g., a chart from two wks. ago, and so on), could you put the date of the chart within the chart itself so we can immediately put it in the proper time context. Looking for the very tiny date in the upper left corner is annoying; it would be great to see the date right off the bat. Thanks. Oh, pear (yum, slurp), peer (here’s lookin’ at you)!

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