Just in time for Xmas.
I thought we’d get a huge one day rally on the fiscal cliff news and then we’d roll over for a bit. Not so. Two strong rally days with potentially more to come. I’m thinking that we’ll rally on the hope for a solution and then back off a bit once some solution is announced, but what do I know?
Per the RSI on the 60min charts of the Q’s, IWM, SPY, DIA, XLF, & IYT, these sectors are either overbought or very overbought. There are a couple of breadth indicators that I follow that are also overbought. This suggests that we’ll have a little pause in the action tomorrow, though news out of D.C. will definitely trump any and every other thing.
We are moving with conviction/volume. Today $SPX did 3.2billion shares, which is 500million more than its average volume of late, and blew by the important swing point of 1438 in the process. When you take out a swing point with this kind of volume action you just have to expect that the market wants to go higher yet.
On the chart I’ve put in a price channel and it is pointing right at 1460. Weeks ago I was pretty certain that the $SPX had put in its high for the year but with the way $SPX is moving now it does appear that the previous highs will fall before year end. Time, of course, will tell but that’s the way it looks from where I’m sitting.
GL & be careful because only the paranoid survive.