Special Risk Capital Management LLC

Just Wait Until . . . . November 23, 2012

Kids often hear “Just wait until your Father comes home ! (implied: “You’re going to get it !”), and that’s what this shortened week feels like.  Basically just 3 days long (Friday was a half day) and many market active groups were on vacation, so it’s hard to draw much if any conclusions.  This posting will be a short one but let’s quickly take a look at this market . . .

What I see is possibly a Sell Climax (SC) followed by an Automatic Rally (AR), which is stopped for the time being at a previous support level of 2565 on the NASDAQ Index.  Next weeks action will confirm or reject that idea so we must “Just Wait Untill . . .”   Maybe we’ll “Get It” or maybe we won’t.  Unfortunately the Volume does not help to confirm much of anything.  It was light all this week which would indicate a Lack of Demand, but that could just be the Thanksgiving Holiday talking.

Sure we’ve broken above a downward sloping trend line (purple line) but we still need a Sign of Strength and a Failed Low (i.e. a higher low swing) to really confirm this structure.  If not . . . it is just a Re-Distribution phase and this market will go lower.  I have done some very selective buying and have a fair amount of Cash right now.     Patience.  🙂

What sectors are strong in the near term?  Out of the 68 sectors the Top Ten are shown below.  Note A/D stands for Accumulation/Distribution (A thru E ranked), a money flow indicator and RS stands for Relative Strength (1 to 100 ranked), how strong this sector is relative to the S&P 500 Index (compared).

Have a good week . . . .  this could be interesting.       …….  Tom  ……

(Chart courtesy of MetaStock; table from www.HighGrowthStock.com; used with permission.  All graphics can be enlarged by clicking on them for easier viewing.)