I know that yesterday I thought the market was going to go higher today and it ended up not. I just got that one wrong. What we in fact got today was actually a lot like yesterday - a probe down below the 11K mark in the Dow but then rallying back to close just inside the lower end of the horizontal channel we've been in now for 10 straight sessions. So although we're now down for three days in a row, the swing trend indicator remains set to "channeling".
Tomorrow will be critical. If we close below 11,000 tomorrow, the channel is broken and we're in a new downtrend. But if we head higher, we'll be in for an 11th day of sideways channeling. Now I know I was wrong about today and I hate to call for a higher close tomorrow for fear of sounding like one of those people who are always making the same call - eventually they're right. But I really think I was just a day early (and a dollar short, obviously).
The VIX, which was looking overbought yesterday is looking even more overbought today. And the bears were unable, for a second day in a row to force a close near session lows, even on much higher volume today than Monday. We have also now traveled all the way to the lower Bollinger band in the Dow (though not closing there). Also, the futures, which last night at this time (1:40 AM EST) were all lower, are now all 0.3% higher.
We're also about to begin December, which according to The Stock Trader's Almanac, is the no. 1 rated month for the S&P and no. 2 for the Dow going back to 1971. And the first day of December is itself historically a good one. So let's see what happens. These trading ranges are difficult to call. It seems logical right now that the market could go higher tomorrow but I'm just not feeling really confident about it right now.
I am also putting together a longer monthly view, being as it is the end of November. That will have to wait for my next post.
No trades today. OMEX closed down 3 cents from where I sold it yesterday and has still lower to go. And it looks like GM may not be following the IBKR IPO model after all, being on a three day winning streak and defying the rest of the overall market.
A summer reading list
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