Tuesday Jan 17, 2012
The amarket rose nicely today and then sold off on CITI earnings woes, what else is knew?
But I noted that several stocks I own had nice moves. Did you notice our contrarian pick RIG up 1.50 today?
Bullish Percent over 200 day MA
It's not the end of the week but we peaked at the weekly chart anyway. I put this on a linear rather than a log scale. The reason is to show that there is still a lot of potential upside. At 61.80 the indicator is closing over both MAs. As we haave noted this will impact fund positions by week end assuming the market can stay this high. Quant programs will generate more buy signals as a result. Eventually money will move from Bonds to Stocks.
Note that last May the market re tested its 50 bar MA after dropping through it, I would not rule that out here and we have noted the overbought position of the market, see the last post.
Now look at the action in Gold
Gold
For some reason the annotation tool is not working so I could not label the waves for you but
I count the low in Dec as the end of a Wave 5, can you count bck to the start of Wave 1in August? That was a big change in mood. We recommended going long GDXJ and CEF at teh end of December and did os ourselves. Now on the dialy chart Gold had a $36 swing today still closing up $10.80. That pullback no doubt reflects the struggle to get over the 200 day MA. There is a downtrend line from the high in Sept that would come in right at the 50 day MA. SO there is still resistance and this may take a bit to overcome.
But one can see the various averages encountering and then overcoming 50 and 200 day and week MAs.
After hitting 1303 the SPX still managed to close at 1293? Will we get a weekly close over 1290?
Another of my stocks URA, was up 7% today. So things are coming together. Again it is only a matter of time until enough buy signals are generated in stock quantitative programs to force money from bonds to stocks. We fully expect the BP indicator in chart one to regain the 90% level.
More tomrrow morn on the open.
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