Saturday, December 3, 2011

Generals Held Supports

In my Nov 17 post I showed how the "generals" of stock market were finally coming under pressure, foretelling a sell-off. I also pointed out that they would have to hold their supports for year-end rally to begin. That is exactly what happened. The confluence of open gaps and moving averages has served as a magnet, but also became a launch pad for bulls. Following are the updated charts of those pivotal market leaders. Nov 17 is highlighted in blue.

It is very important to identify that at this juncture these stocks are ready to breakout to higher levels. This said, I think that a minor pullback will occur in the first part of next week. I will use this opportunity to reestablish long positions in the market. My ultimate goal is to buy SPX @ 50 dsma. But market may not want to let many in, as underperforming fund managers will chase into the end of the year. So I will scale into my positions on weakness, using short-term charts' support levels.

(click on charts to enlarge)






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