Perspective: As we near the close of 2013, it is important to remember that we have been 1-timeframing up for 11 months straight with only June showing a slight dip. Historically, the period between Oct-Mar has been the unusually strong for the stock market. Most talking heads expect that to continue as long as the Fed does not take away the punch bowl. Markets are likely to be thin next week as it is Thanksgiving holiday week.
The weekly chart confirms the longer and intermediate trend (UP) and shows a 3 week Balance between 1736.60 - 1774.50. Last week, the market tested the top of the balance area to the tick at 1774.50 and bounced back up. So far the weekly breakout remains intact as the market made new highs on Friday.
The daily bar chart below shows 2 balance areas and the 1800 level. Friday the market rallied above the prior balance high of 1799.75 and settled above the 1800 level. For Monday, if the market is able to stay above the 1800 I would expect that we make new highs. Acceptance back below the 1800 level opens the possibility of re-testing the prior balance high of 1774.50 (made in overnight session). Also, remember that the prior balance high in the regular trading session is 1771.50 - shown on the chart below.
The profiles below show that Friday was a double distribution day with Value building clearly higher as compared to Thursday. The market also left a poor high suggesting that the auction is not complete to the upside. However, Friday's profile also shows a couple of anomalies as the market auctioned higher. Anomalies are often the result of forcing action such as short covering and long liquidation-market action that doesn’t always allow for rotational, investigative auctions. They produce high odds of being revisited, however, very often, Anomalies are not corrected or repaired on the following day. For Monday, I will be observing whether we open in or out of balance relative to the upper distribution from Friday. Opening within the upper distribution and finding acceptance suggests that we auction higher. 1798 - the low of the upper distribution represents short term support. Finding acceptance in Friday's lower distribution targets Friday's low and the naked POC from Thursday at 1790.75.
The weekly chart confirms the longer and intermediate trend (UP) and shows a 3 week Balance between 1736.60 - 1774.50. Last week, the market tested the top of the balance area to the tick at 1774.50 and bounced back up. So far the weekly breakout remains intact as the market made new highs on Friday.
The daily bar chart below shows 2 balance areas and the 1800 level. Friday the market rallied above the prior balance high of 1799.75 and settled above the 1800 level. For Monday, if the market is able to stay above the 1800 I would expect that we make new highs. Acceptance back below the 1800 level opens the possibility of re-testing the prior balance high of 1774.50 (made in overnight session). Also, remember that the prior balance high in the regular trading session is 1771.50 - shown on the chart below.
The profiles below show that Friday was a double distribution day with Value building clearly higher as compared to Thursday. The market also left a poor high suggesting that the auction is not complete to the upside. However, Friday's profile also shows a couple of anomalies as the market auctioned higher. Anomalies are often the result of forcing action such as short covering and long liquidation-market action that doesn’t always allow for rotational, investigative auctions. They produce high odds of being revisited, however, very often, Anomalies are not corrected or repaired on the following day. For Monday, I will be observing whether we open in or out of balance relative to the upper distribution from Friday. Opening within the upper distribution and finding acceptance suggests that we auction higher. 1798 - the low of the upper distribution represents short term support. Finding acceptance in Friday's lower distribution targets Friday's low and the naked POC from Thursday at 1790.75.
