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.
SPY NOW ( Broke with weakness & fell back)
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.
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. https://www.chartfreak.com/my-secrets/