Commentary: Paul Ebeling on Wall Street
$DIA, $SPY, $QQQ, $VXX
It is the 2nd week of Y 2017.
The the smaller cap stocks look to fare better as big funds buy them in the “January Effect” action. This weeks performance will tells more, as to the market’s continued efforts to extend The Trump Rally.
The NAS Comp and S&P 500 put in new highs on low volume and failing MACD. DJIA failed to break 20,000, moving laterally below that mark on very high volume, suggesting that sellers were active, selling each time DJJIA tried to take out the Key resistance at 20,000.
The “churn” is an indication of money moving out of the market and could spell the end of this current rally. Overlay the Bullish advisor sentiment at 60ish and you have to be cautious; watch how the leaders hold up.
There are good stock setups in many sectors, and some China stocks that are now moving well.
With the sentiment so high, one has to proceed under the assumption that the Rally is now in its end game before it puts in a healthy correction.
But, it can still put in more to the Northside, it has the setups to do it.
Play good moves as long as they show up and good runs continue. When breaks higher quickly roll and fail, and when good rallies break trend, then you know the move is out of steam, be cautious, and alert.
Watch carefully to see if the money comes in on the buy side and can Rally the indices to higher highs on strong volume.
Note: good setups need to yield good Northside moves to produce broad index moves.
Remember, do not fight the tape, always take what the market gives.
The Bulls Vs The Bears
VIX: 11.32; -0.35
VXN: 13.85; -0.78
VXO: 11.05; +0.05
Put/Call Ratio (PCR) CBOE: 0.97; -0.19 still holding at a higher mark, funds are still buying protection.
The Bulls Vs The Bears
After holding at 59.8, Bulls jumped over 60 last week, moving over that mark considered indicative of topping rallies.
The Bulls are at 60.2 Vs 59.8 last
The Bears are at 18.4 Vs 19.6 last
Support and Resistance
DJIA close: 19,963.80
10,987.53 is the December 2016 high
The 20-Day EMA: 19,764
The 50-Day EMA: 19,336
The 50-Day SMA: 19,179
18,669 the Aug 2016 high
18,595 the Jul 2016 high
18,351 the May 2015 high
The 200-Day SMA: 18,345
S&P 500 close: 2276.98
2277.53 the Dec 2016 high
The Y 2016 trendline: 2247
2213 the Nov 2016 high
The 50-Day EMA: 2220
The 50-Day SMA: 2205
2194 the Aug 2016 high
2175 the Jun 2016 high
The 200-Day SMA: 2141
NAS Comp Close: 5521.06
The Y 2016 trendline at 5440
5404 the Nov 2016 high
The 50-Day EMA: 5371
5340 the Oct 2016 high
The 50-Day SMA: 5338
5288 the Sept 2016 high
5271 the Aug 2016 high
5232 the Y 2015 high
5170 the Oct 2016 low.
The 200-Day SMA: 5107
Have a terrific week
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