Wednesday, January 25, 2012

Wed Jan 25, the market grinds higher.

No chart but not much has changed since the one in the previous post. The market continues to grind higher in an orderly fashion. It appears to be correcting its excesses internally as individual stock groups rotate in and out of favor.

The SPX cash closed at 1326.06 with the upper 20 day BB at 1331.44. So there's about 5-8 points of clear air overhead before the SPX gets above the 2 stdev BB. The 3 stdev BB is 25 points higher and a potential target roughly in the 1350 area.

The MCO finished at +174, in overbought territory but below the +200 level which has produced spike reversals. The MCO has spent 16 of the last 22 days above +100. This means that the 10% Index has been above the 5% Index by 100 or more points for most of the last month and indicates a strong upward trend in the AD line.

The 10% Index finished at +624 today with the 5% Index at +450. These are readings which are equivalent to a big thrust move in a MACD indicator and though they are overbought do not signal a top until they form a negative divergence with the price.

The Summation Index is at 3929, roughly 900 points above its 13 day moving average. It's been above the moving average for about 20 days and my MACD on the SUM Index indicates it would take at least 10 trading days to stall it enough to force a cross below the 10 day MA.

Finally, the Climatic Volume Indicator is NOT SPIKING, its 10 day moving average is a +25 (bullish neutral) It's been 15 days since the last minor spike above +50. The way I am reading this is that so far there is no rush to get in the market, no frothy distribution.

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