SPX Sending Mixed Signals

posted Oct 6, 2014, 10:54 AM by Katie Shook

Last week was a wild ride with volatility definitely back in the picture.  It appears the votes, while not all counted, are giving a strong indication of where this market is headed.  And it may not be pretty.

The Thursday reversal was very strong, but the Friday follow-through failed to erase Wednesday’s losses.  The weekly pattern, as a result, is a little more encouraging than the daily pattern.  It’s possible we put in  a ‘low’ for a little while last week.  However, the jury is definitely out.  The daily patterns are less convincing.  We’ll need to see a close above 1991 this week — or better yet, above the 2000 level again.  That would likely get buyers coming back to the table.

It’s difficult to imagine a world where the indexes can continue to climb to all-time highs while the underlying positions are so shaky.  It remains to be seen if this is the beginning of a bear trend just another speed bump.  I’ll be listening closely to the Fed Wednesday — and I’m also interested to see how earnings season shakes up.  (My secret opinion is that – since central bankers across the globe are willing it so – this thing still has legs to go higher).

Daily Digits

Daily Digits 10-6-14

Weekly Estimated Range

Weeklies 10-6-14

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