Monday, February 9, 2009

Market Monday's

I'm back. Let's take a look at the markets to see what the charts say. As always, you can click on a chart to get a larger image.

This is the best looking chart of all the big indexes.

-- The index has been moving higher since the beginning of February, printing some strong bars in the process

-- The SMAs are bunched together which is never a good sign. However, the 10 and 50 day SMA are both moving higher which is a good thing.

-- Prices are above all the SMAs

The IWMs (Russell 2000) is forming a consolidation pattern (as are the other three ETFs). Regarding the price SMA relationship notice he SMAs are in an extremely tight pattern with no discernable trend one way or the other. Also notice that prices have moved through all the SMAs, but (again) prices are in a consolidation pattern.

After gapping lower in mid-Jamuary, the market moved into a broadening consolidation pattern. Like the other two averages the price/SMA picture is extrememly cloudy. Remember -- we want prices above all the SMAs, with the shorter SMAs above the longer SMAs and all the SMAs moving higher. That's the most bullish alignment possible. Here it's just a jumbled mess.

Finally we come to the SPYs. There is an issue on this chart. The extreme candle of two days ago changes the pattern from a consolidation pattern to a broadening pattern. The issue I have with this analysis is that price is a statistical outlier; we didn't see a ton of price action in that area. Instead we have just one price point. However, either way we have an index in consolidation mode.

Bottom line: these charts aren't going anywhere.