Last Thursday night I was really expecting a bad day on Friday. While the Nasdaq did end the day down half a percent, the Dow, which is what I was looking at, was actually up 49 points. I was just plain wrong, but that's how it goes on options expiration days. Anyway, I'm happy to be wrong when the market ends higher.
Now looking at the upcoming week, there is nothing at all in the weekly chart to indicate anything but a continuation of the current uptrend. The Dow has been riding the upper edge of the weekly RTC since the beginning of December. And last week's volume was higher (in a four day week) than the full week before. Add to this the fact that right now (1:30 AM EST), all three futures are up by about a third of a percent. So all in all, though the correction everyone seems to be clamoring for may be coming, the charts don't show it arriving tomorrow. Of course, with a Fed meeting coming up, anything's possible, so I don't want to go too far out on a limb here, but I think we still have higher to go.
Note particularly that we closed last week at 11,872, thus finally breaking out over the 11,867 resistance level. With the momentum indicator at levels that leave a lot of room to run, this is further evidence that we may see higher this week. My only concern right now is that we closed on Friday pretty far away from the daily pivot currently at 11,804. When we get extended this far from the pivot, the Dow tends to be attracted back to it. I guess we'll have to see if the positives can overcome this one point tomorrow.
Though the Dow gained last week and I was up three days out of four, I still managed to lose 0.59% on the week, due entirely to some bad luck on Tuesday, when my low price/high yield portfolio took a 10% tumble. So this leaves me up 1.18% YTD which is OK, but below the Dow's 1.72%. One of my trading goals is to outperform the Dow, so I'm going to be looking into this this week.