Last weeks rapid advance through the 2200 level-confirmed that the heavy accumulations under the 2200 level-the previous few weeks would lead to an inevitable rally-since most Dow stocks and S&P 500 stocks have not yet displayed the distribution tendencies to signal the end of a rally-we can probably still expect higher prices
Had insiders wanted to, they could have easily opened stocks much lower this morning on the “Italian Referendum Vote”. Like the Brexit, it could easily afford an alibi to force investors and traders to sell and they to acquire new stock and contracts, but since they are holding a large amount of stock and contracts under the 2200 level, their merchandising needs will always come first.
It is sharply advancing prices which will encourage investors to buy after shrugging off the Italian “news”, it is the higher prices on a gap opening, that will bring the buying in so they can unload stock and contracts, at a profit for their accounts.
In a holiday shortened week, insiders were able to sneak prices higher on light volume, until we see heavier volume PA on advancing prices, the market should continue higher in the coming weeks. Daily PA will dictate as we move forward to the end of the year.
Very heavy insider accumulation, signaling higher prices, is shown on the attached chart.
Since the extreme market action of the election night and following two days the markets have settled down with less volatility and greatly reduced volume – It is a conflicting picture and it seems with the events going on, it will most likely remain so for the foreseeable future, although the PA somewhat suggests 2200 and little over, there are definite signs that an imminent pb could happen also, we will be examining closely the pa on the dailys and remain cautious as to any longer term outlook
Last weeks action – and mainly on Tuesday- was in preparation for the upcoming election with the accumulations and distributions, and the PA for the rest of the week- Since there was a negative announcement that sent prices plunging- it only made sense that there would be a subsequent announcement to send them back higher before the election. It would also be highly likely that based on this AM’s PA, we should see a fair amount of volatility today and this week
On both Monday and Tuesday last week, the ES tried to break the 2150 level and failed. The big market was over 2150 both days though. The market basically declined all week in the same narrow range it has been in since September 9. The “surprise” announcement on Friday at one PM had the market retest and then recover in the same narrow range. Although there will probably be some volatility this week, I suspect it will be within the same narrow range, overall. I still feel this narrow trading is preparation for a larger move after the election and into next year. We are still leaning toward a bull market, however it will most likely be be tenuous and erratic at best.
After hitting its recent low of 2107.75, the ES has stayed in a narrow range between just under 2120 and the 2150 level. It appears going into this week, with the merger announcements and the PA, that the 2150-2160 level may be achieved this week. But the overall narrow range should last through the election. So for the moment, staying with a slight bullish outlook overall, but should stay relatively narrow for a few more weeks.
On Tuesday, the narrow range around 2150 expanded somewhat and the daily range was quite wide between 2160.75 and 2121.75. On the 13th, it appeared that a temporary bottom at 2107.75 had been established and when it traded to 2143.25 the next day it appeared the bull market could still be alive for the 2170 area. But 2100 is close below again, and the big election is coming, so uncertainty remains the main factor. Going into Monday and the coming week, it is hovering right in between the 2100 and 2150 level. It seems the expanded,but still narrow range may continue for immediate future.
For the past week, the range was somewhat narrow between 2132-2168. Breakouts were attempted at the 2170 level but failed. We’re still narrowly favoring a continuation of the bull run to the 2180 level and then possibly 2200. But the PA suggests it is very tentative for a bigger rally. For the week we will be watching the PA closely around the important 2150 level and looking for a possible break over 2170. Monday AM we have small PB developing for the open after the late day drop to the 2156-2158 level on Friday.
Last week was was relatively calm in a narrow range before the Fed announcement on Wednesday. The rally was fast after the Fed through the 2150 level, catching traders off guard as they entered the market on the buy side Thursday AM. It is now apparent that a trap was set for them as the market never got over 2173, and is now pulling back under 2150. The price action under 2150 should reveal signs for a poss rally to the 2180 area. If this is the beginning of a larger PB as the longer term charts have somewhat indicated, then the rallies will be shallow and the PA should reveal that as the week progresses.