Good morning all!
I told all of you yesterday that I'd have updated watch lists ready for all to see. As I sat down to write essay upon essay and application upon application for the colleges I've been applying to, however, I realized that I did not have the time to do so. This didn't bother me in the least bit, as I realized I needed to change it up a bit from my normal Micro/Small Cap jargon.
Today's action showed all of us traders that trade day in and day out that "she ain't done breathin' yet." Mother Market has some fight left in her, and although I whole-heartedly agree with @theEquilibrium's weekend tweet -
"After looking at hundreds of charts tonight - we're actually going lower this time, for real."
- there's always that possibility that the market will surprise us all with a drawn out consolidation and a push higher.
Tonight, I'll be doing a full index breakdown, starting with the $DJIA and continuing on with the $SPX, the $COMPX, and finally the $RUT. If you remember a couple of posts back when the markets were stuck in consolidation, I wrote an analytical post like this one in order to delineate a possible market direction. My goal with this post (like the one before) is to give all of you a different perspective on the different market indexes. Each index will have two different time frame charts (20 Day 15 Minute, and a 2 Year Weekly) with a separate analysis portion below each.
Without further ado, Ladies and Gentlemen, I present to you this week's Aftermath Monday Mayhem:
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$DJI 20 Day, 15 Minute
As you can see in the chart above, the $DJI is in the midst of about a week long consolidation. The MACDH is beginning to turn up for the better, while the %K statistic of the Fast Stochastic is closing in on a possible crossover of the RSI(20). To me, the $DJI looks somewhat bullish on a breakout above the current symmetrical triangle price pattern.
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$DJI 2 Year, Weekly
On a weekly time frame, the $DJI could go either way. Personally, more of a pullback looks necessary before moving higher - touch upon the ascending trend line would be warmly welcomed if it comes on low volume distribution. The 100pd SMA and the 20pd SMA are beginning to act as support and resistance borders for the price of the $DJI if it makes a drastic move either higher or lower. As of now, I am ambivalent about the status of the $DJI.
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$SPX 20 Day, 15 Minute
With a break above the 1058 price resistance early in the trading session, the $SPX currently sits in an intraday, descending triangle price pattern. A break above the descending trend line resistance will give the $SPX free range to hit 1074 yet again, especially with a recovering MACDH.
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$SPX 2 Year, Weekly
The $SPX is in more of a tight situation than the $DJI, as the ascending triangle price pattern seen in the chart above is currently giving the $SPX less room to move up or down. I am waiting for either a quick breakout to 1097.50 OR a quick breakdown to the ascending trend line support (also supported by the 10pd SMA), followed by a big break to the upside. Looking at market sentiment OUTSIDE of this chart, the healthier move for the $SPX is the quick breakdown - this, however, seems highly unlikely when looking at the 20 Day, 15 Minute chart. Economic Data will most likely make or break the $SPX early in the week and set its tone for the "Back 9."
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$COMPX 20 Day, 15 Minute
The $COMPX bottomed out on the %K statistic of the Fast Stochastic towards the middle portion of the trading session on Monday. The $COMPX was the only index to show a more prevalent Head & Shoulders price pattern. To me, this bodes somewhat negatively for the Technology sector, especially with the amount of resistance (descending trend line and 2140.50 price level) the $COMPX has above its closing price from yesterday. Holding on to the "Oversold" standard deviation line of the Bollinger Band, the action out of the $COMPX, in conjunction with the $SPX's action, could make or break where the markets end up in the very short-term.
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$COMPX 2 Year, Weekly
The rising pennant (or rising wedge) price pattern is beginning to get extremely tight as it continues its ascension towards the 2167 price resistance. Although this price resistance is not out of the question, we must also look at the 200pd SMA as a strong, overhead resistance to the current 2167 price level. A breakout in the $COMPX is needed to keep this market not only from pulling back, not to mention alive - a strong volume and momentum push out of the Technology sector is all this market needs in order to not rollover.
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$RUT 20 Day, 15 Minute
Like the $SPX, the intraday descending triangle price pattern will be a key player when it comes to telling the $RUT how far and how long. I see a possible consolidation among the price of the $RUT, as the RSI(20)'s patterns from yesterday's market strength look extremely similar to September 16-17 RSI(20)'s pattern - this allows me to conclude that a break above the descending trend line could end up being a fake break and a price "ride" along the 611.50 price support.
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$RUT 2 Year, Weekly
Like the $COMPX, the rising pennant price pattern is evident when looking at the weekly time frame chart. The break above the 100pd SMA two weeks ago has set the $RUT up to use this particular SMA as a driving force to its price pattern's trend line resistance. The $RUT, like the $DJIA, has a lot of room to fluctuate between its support/resistance trend lines of its price pattern prior to reaching its next price level resistance (655). The uptrending pennant range trade is something I do not mind seeing over the next month when it comes to the $RUT and the Small Cap tickers.
Each one of these index charts, no matter what time frame it may be, tells a story. As you can see above, there are a lot of conflicting details from story to story, and right now, the story is beginning to get fuzzy with many chartists like myself. Although I did add two tester positions at the end of the trading session yesterday (SONS and ICO), I indicated that these are high risk positions that I am merely testing out. In my honest opinion, there is a lot resting on Wednesday/Thursday's Economic Data - if September was a good month for the economy, the impact seen across the general markets will be astronomical.
Stay light, keep your head on a swivel, and most importantly, trade what the market gives you!
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