Directional Analysis

The Consolidation lasted three days, and it was as I depicted on my previous Video Update “shallow”.  Today we are busting through the resistance area with nice volume, and more than likely will continue through the end of the month. I would like to say, this rally is not an extension of the economy being much better than expected, but its really more of a “short seller’s squeeze” with some Technical triggers. None the less, this month will be the best October in a very long time. In the following Update I show how the technical tools have triggered the rally and where we should be heading to in the near future.

On Friday the market was finally able to close above the resistance area which kept the S&P 500 Index sequester for almost two months.  For now, almost all the Major Indices are doing an Engulfing monthly pattern which I depict in this video update. I have also pointed out some of the sectors that are leading the markets and are looking the best potential gains once they take out the areas of resistance I have drawn. Finally, I look at the energy sector and how the US Dollar has a significant relationship with The Major Indices and some of the Commodities.  The Market is up between 16-20% in about three weeks since I called the bottom using technical analysis; I expect a brief pause before we continue this end of the year rally.

This week’s rally has been nothing less than amazing. On the last video update, I had explained what we will be looking for to know if this rally was it. With this week’s action, the markets have not only confirmed to me that next week the rally will continue, but we are now showing in the monthly charts as well. In this video I show you why the markets will continue going higher, not only from the future perspectives, but from the ETF’s and Dollar Index too. Check out this video and stay tuned to see where my next targets are for the end of the year.

Quick update to see where we are at and drawing a line in the sand. We are doing a backtest on the broken down trend line, but I would like to see certain levels that I have drawn. Looking at the Dollar index, Gold and Silver Futures to see where we are at and what we should expect for the next few weeks.

Today is the third day in a row of gains and we have created a candle pattern called Three White Soldiers, which I posted a quick description of the pattern just below this video post.  So far we are doing what I was looking for, in the video I show where I am looking to find some resistance and once we break that resistance we will be off to the races. I also touched up on Gold and Silver and what I believe we will be doing in the intermediate future.

Yesterday, the Market had a reversal in the last hour of trading with massive volume we have not seen since the lows of August 8^th.  Today, in the overnight trading, the S&P 500 Futures have already taken out the highs from yesterday confirming to me that we will continue with this rally. I will like to see, once the market open, a hold of yesterday highs and a continuation of the buying pressure which will make the short sellers have to continue covering their positions and will just add fuel to the rally. Yesterday, was a classic double bottom with volume coming in to reject those low prices. I will do a video the soonest I get confirmation on this rally.