On Thursday, the S&P 500
(INDEXSP:.INX) made a(nother) new all-time high early in the session, then reversed and tested support near 1883 before recovering to end the day slightly down. Even though yesterday's candlestick was technically a minor bearish reversal candle, I don't think much can be read into it yet, because so far support has held. That said, sometimes these types of minor bearish candles function as early warning signs of a pending reversal from higher prices.
Meanwhile, although SPX and the Dow Jones Industrial Average
(INDEXDJX:.DJI) grab most of the headlines, higher beta indices such as the Nasdaq Composite
(INDEXNASDAQ:.IXIC) and the Russell 2000
(INDEXRUSSELL:RUT) are still trading below their March highs. It's possible we'll begin to see markets even out a bit now that the Fed is hitting stride with the QE taper, and 2014 may end up having a different character than the frothy 2013 market.
Overall, there's been no material change in the outlook since Wednesday, other than to note that we can finally take the diagonal off the table since SPX broke through 1887. I've also updated the near-term pivots to reflect the latest price action. As a result of there being no change from Wednesday's more detailed analysis, today's update will require few words; I'll let the charts do most of the talking. (If you missed Wednesday's update, please refer to SPX and NYA: Equities Face Long-Term Resistance
Click to enlarge
SPX still faces long-term resistance in the upside target zone:
Click to enlarge
The NYSE Composite
(INDEXNYSEGIS:NYA) has reached the first upside target zone. Incidentally, if you're wondering why I frequently chart NYA, it's because this index is a much better representation of the total market than SPX or the Dow Jones Industrial Average. Generally speaking, they both tell folks if their blue-chip portfolio is gaining or losing, but NYA tells us the health of the overall market.
Click to enlarge
In conclusion, beyond updating the near-term pivots, there's very little to add to Wednesday's update. It's worth noting that today is Non-Farm Payroll, which sometimes brings volatility. Trade safe.
Follow me on Twitter while I try to figure out exactly how to make practical use of it: @PretzelLogic.
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.