Monday December 28, 2015
Key Data points:
Key Developments :
- Market Remains Stuck Consolidating between swing highs and lows.
Off of Friday’s sell off into the close, markets gaped and traded lower into the 11am hour, where buyers committed themselves a bit to grind the market to almost flat, but were not quite able to fill the opening gap.
There really isn’t much to talk about here. Taking a look at the 30 minute chart, the market is just in some consolidated chop and still appears to be making a series of lower highs and lower lows. Even today’s action appears to be just a bearish flag formation.
Now if you want to be bullish, maybe we could say that this is the formation of a cup/handle. But we would need to take out not only Thursday’s high, but also the 12/16 high 2076.71 to be confident as that would officially give us a higher low and higher high. We really need to see that here above the 2020 save last week. Until that happens the bears are in control of the swings.
So where do we go from here? I personally need to see far more pattern based price action to do much of anything within the indexes. When we are stuck between swing highs and lows, that tells me to sit on my hands and wait as it will only lead to frustration trying to trade within it. Things will clear up soon enough, but let’s watch the two things offered above.
1) The potential of today’s action being a bearish flag, so watch for a break and particularly a move below today’s lows.
2) The potential that this is a cup/handle to take us higher.
We don’t need to gamble to make money in this market, let’s continue to let price lead the way, and when it’s not it is just time to be patient.
The Bottom Line:
The market is temporarily not giving us much to work with. Let that change before trading aggressively. We are in a low volume week with many on vacation.
Chart of the Day:
Watch this big cup/handle pattern on this bio-tech. It appears to have successfully re-tested the 80.42 breakout level. It has a measured move target of 154.24. Obviously needs to stay above 80.42.