Hello Everyone,
Long Term: Bear Market, Intermediate Term: Downtrend, Short-Term: strong bear market rally today (SPX closed at its downtrend channel lines yet, but favor a breakout to 3800 on SPX)
Market Comments
: Strong morning gap up with some news catalyst out of the UK. For the daily the SPX closed up 2.65%, while the Nasdaq closed up 3.4%. Last week the SPX and QQQ had RSI and MACD divergence at last Thursday's lows, and we saw some positive divergence in the McClellan Oscillators, thus the market had the potential for a bounce and for a higher low, which we now have in place. With today's rally price once again retested the downtrend channel lines, which late last week proved to be resistance. While price could reverse down from here, we favor price breaking over the downtrend channel line on the SPX, with a 1:1 symmetry target of at least 3800.
News Items: We are in earnings season now and the reports will be potential price moving catalysts for the markets.
Bonds/Rates: TLT 20 year bonds are still weak, which means the 10 year is still strong.
Currencies
: The US Dollar sold off today and could be a positive should this continue to decline.
Precious Metals and Mining Stocks: Gold closed up today, and GDX lead gaining 3.2%, we still have a higher low in place.
Reversion-to-the-mean systems: The 22 systems are all in cash and we probably won't see any longs at this time (maybe some shorts after a good rally)
KISS Long Only Trend Systems: no changes they remain in cash. Remember, because we are in a bear market, the daily and weekly systems will be in cash most of the time, and when they do go long, price may be well off those lows; I mention this because if you wish to get into the SPX or QQQ for a trade opportunity, you may want to consider using something else to get in earlier.
have a great night,
Matt
