Market Review ZT

sony

Market Overview
We get towards the top of our 6-week lateral bases and it looks like we'll finally break out. It's the exact same story as when we get towards the bottom of our existing bases. Breakdown looks inevitable. It gets very emotional at both ends because the consequences of a breakout or breakdown are large. The market is likely to have quite a large move once we get a decisive break and thus the emotions get intense. The only problem is, neither side is getting what they want, and there's a good reason for that. There is a lot of good news from both the economic and earnings front. That's the bullish case.
However, there has been a tremendous run up over the previous months before this lateral consolidation or range-bound market took hold. This keeps the market more in pause mode. We can't really break it down because of the good news out there, but we can't break it out because of the tired and mature nature of the move off the lows. We have a market, instead, that's catching its wind. Bottom line is, we're moving sideways, and that may be the case a lot longer than anyone would like. That's the market’s job. To frustrate and make things tough. Get everyone to do something they know they shouldn't, but can't help themselves from doing. That is, to buy too much, or short too much, out of boredom. Lateral markets are the absolute worst nightmare for traders. Once a trend is over, traders want more and more. They don't get it, so they play more to try and "make up" for what they feel they're missing. If you play more heavily, the whipsaw will force you out of plays one by one. There's no way around it. In lateral bases, light and slow is the ONLY way.

The Week Ahead:
Stocks on Friday grabbed back much of the previous session's losses to finish up for a second straight week.
The Nasdaq popped 0.9%, leading the pack. The NYSE followed with a 0.8% gain. The Dow and the S&P 500 tacked on 0.7% and 0.6%, respectively.
Volume fell across the board.
Friday's rebound in weaker trade continued a recent trend of up days in reduced volume. Including the follow-through day on Nov. 9, the Nasdaq has logged only two gains in greater volume in the past five weeks.
A similar pattern is occurring in the indexes' weekly charts.
That indicates reluctance to buy among institutional investors and isn't the kind of performance that enlivens bulls.
On Friday, though, there were more than a handful of highly rated stocks making significant gains in fast trade. Only one slid in heavy volume.

We will see the market most likely stay in its newly defined range with the bulls trying to protect any pullback towards the 50-day exponential moving averages and the bears defending any move towards the 1101 area. It's just that time folks. Time to keep it very light. The market will make its intentions known in time.
Slow and easy
This month the financial group did quite poorly weakening the bullish foundation in the markets.  The markets do remain bullish and next week is a BIG week for economic news (retail, PPI and CPI) that can sure affect the markets either way.

xnz

thanks for sharing

busywind

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