“Better than expected.”
This move is certainly not what I expected, even though the 5,3,3 Sto suggested last week that we would get some upside this week. $SPX up 32pts and 2.26% for the week so far. Can it continue? Maybe.
There’s an old saying on Wall Street that goes like this: Sell double tops and buy triple tops.
$SPX is now setting up for a triple top breakout and the way the markets have been moving these past few days it’s likely to happen and then we’re off on a new leg of this rally. I don’t know if we’re going to see it tomorrow because the RSI’s on the 60min charts of QQQ, DIA, SPY, IWM & IYF closed well above 70 today and $NYMO tagged its upper Bollinger Band. This suggests that we should have some give back tomorrow but, like the pause day that didn’t happen on Tuesday, the markets may have other plans. Regardless of whether the triple top breakout happens tomorrow or Friday, this would be a pretty powerful statement that the market wants to and can continue higher. There are a lot of people who buy breakouts above resistance and that is probably what we’ll see if $SPX can break above the 1466 area sometime in the next few sessions.
Daily chart of $SPX showing overhead resistance in the 1466 area. Also note that the 20/20 Sto came in with a fresh ‘buy’ signal today and also that instead of weaving back and forth over themselves the DI lines are pulling away from each other rapidly. In other words, the chart looks pretty good from where I’m sitting.
(Click on the chart and it will open in a new window)
P.S. Really, take some time and watch the video in the post below this one. It’s all about risk and how to manage it and it’s well worth your time.