Long Sp500 from 1201 or Higher But Short Below 1201 or Lower

I am switching back to a Long Signal only if the Sp500 gets and stays above 1201.  The 1201 level on the sp500 is important enough that if breached to the upside could lead to that cup and handle pattern I have been talking about for some time now.  It is looking like the market will be able to do it and maybe even continue higher next week.

The SMH is breaking to a very confident new high today and seems to be leading the way for the other indices as I had alluded to in previous posts. 

The ‘North Korea’ drop in the market yesterday still printed a higher low and could warn that the corrective action is nearing completion.

On the other hand the volume on today’s rally is horrible which of course comes as no surprise given the USA holiday week time frame.

If there is any bearish potential in the market then it should reveal itself next week as we change over to the December monthly candlestick.  More bearish potential would be helped along by a weekly MACD bearish cross which may be a week or two away depending on how the price action resolves the next week or two.

The US Dollar Index or the UUP ETF is amazingly resilient today despite the huge ramp up in equities.

So the bottom line is that the next 2.5 trading days that finish November 2010 could be pivotal in the sense that they could open a possible door to a weak December, or that potential setup could be completely evaded with a strong move higher the next 2.5 trading days that changes the monthly November 2010 shooting star candlestick into something much less bearish.

Even if a monthly November 2010 shooting star candlestick is created it does not guarantee a weak early December.  The market will need to show signs of weakness leading into early December.

Posted in Index Trading, SP500

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