Friday, January 26, 2024

Charts for Jan 26, 2024

Bulls keep ruling the roost and the weak previous day was shaken off. But 4900 keeps offering resistance. As I pointed out before, extended moves can become more extended. That's what we see right now. There is nothing you can do in this kind of market, other than sticking to what you own from much earlier Buy signals. People who traded "The Switch" (strategy PDF #3) are doing extremely well. Shorter term swing traders can only wait for a good pullback. If I could predict when that will be, then I would have been very rich 20 years ago already.
After an 800 point rally it would be normal to give back 200-300 points at some point. That's why buying at this point is more risky. But then more than a few traders may be waiting for such a 200-300 point drop. And they may have been waiting since November. If enough of them are desperate to deploy cash then they may step in after a 100 point drop already. That's the fun of stock markets.

Market charts:

* 323 SPX stocks in bullish mode. Significant uptick. Stays well below weekly bullish%.
* BullsPower at 36, BearsPower at 10.
* 324 stocks with upward MoM (dashed green line), which is again down from the previous day. A healthy 80% reading was not seen on this swing.
* The daily Watershed (dW) is currently at 4764.
* An attempt to break out above the Watershed envelope. Closed right at the border.

* BMO goes up. Remains at risk of painting a double bearish divergence if it makes a weak peak.
* ELC goes up.
* Repellor is at 4720.

* SPX Rotator goes up, but without much upward traction so far.
* The red component keeps falling. The red and green line are converging.
* Market closes above the Bands again. Back in runaway rally mode? Don't rule it out.

* SwX stays yellow - neutral.
* Daily MoM goes up and is now >8. Watching out for a possible bearish divergence being made.
* The overhead parallel trendline (green) is still being tested.

* Icebergs algo is gaining strength.
* "Lava" has come back. But at a lower level. That too can become a kind of bearish divergence.

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