July 21, 2017

What to Expect Going Forward

Another gap up today, which was closed late in the session. After the gap closed the indices held steady until the last ten minutes of the trading session which was most likely due to some end of the month manuevering by the institutions.

Overhead resistance is very strong at the 1490 level on the S&P. My guess is given the overbought levels in the major indices plus a few of the major sectors will lead to a decline early next week, but as we all know nothing is certain.

As all of you know I typically deal with the short-term (1-5 days) and given what I stated yesterday I am still expecting to see the market move lower over that timeframe with a possible retest of the 1440 area. I would not be surprised at all to see the market vacillate around in a range until the December 11 Fed meeting, that is unless the Fedsurpries the market with an early rate cut.

After the short-term reprieve (if there is one) I think we could move higher into the New Year. My post several days ago that touched on bearish November lead to Bullish Decembers is the main reason. Of course, we will have to see how the market reacts going forward, but it is hard to deny the stats and the seasonal conditions lean heavily towards the bearish camp.

It would also not surprise me to see the indices finish higher on Monday, possibly testing the highs set in today. Again, as long as the S&P is unable to move through the 1490 level and sustain itself there, I still think we will see a move lower next week.

I will have more to say on this matter Sunday. Have a great weekend and Go Ducks. Believe me with all of our misfortunes at the end of the year we could use a little luck.

Overbought/Oversold for November 30, 2007

S&P (SPY) – 68.5 (neutral)

Russell 2000 (IWM) – 59.1 (neutral)

Dow (DIA) – 70.8 (overbought)

Nasdaq 100 (QQQQ) – 61.7 (neutral)

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