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Market Lift Off January 4, 2013

Posted by Tom in Thoughts.
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Actually I’m feeling pretty good about my market analysis lately.  If you look back in the Blog archives to the right you can see that I was thinking the bar (12-21-12) circled in dashed red might be a “spring bar”, which in Wyckoff terms is a Bullish bar.  Well, I was off by 5 days since the Spring bar came in on 12-31-12; circled in the heavier solid red oval.

This week I’ve also added a “Tentative Up trend Line” on the far right side of the chart (dark blue line).  We now have enough data since the last swing Low point to spot this in.  Yes, it may need to be redrawn IF the upper bounds (dashed line) changes but for now it’s a decent guide post.    (click on the chart to enlarge it)

NASDAQ

Now many would think that the modest / low volume at the end of this week is not a good sign, and that may prove out.  But at this point I’d say that’s OK to have low volume.  That indicates that there are more than a few that are skeptical about this breakout.  The fact that we held these higher breakout prices for the past 2 days is impressive.  If the markets drift up from here next week many will be forced to enter, driving price even higher.  IF that were to occur, then I’d be wary of a pull back.  The old saying “Once everyone has bought, there’s no one left to buy” would come into play.  So, be watchful IF the market moves higher.  At some point, we will see a correction back down.  That’s normal.  The amount of that pull back and the volume indicated will give us an idea just how strong the underlining market really is.  Right now it looks like we’re “climbing a wall of worry”.

The rest of this report would be rather redundant with my monthly newsletter to my clients, located in the “Newsletter” tab above.  So I suggest that you may wish to take a look at it since it supports this Bullish environment (note the pie charts toward the end of the newsletter, along with the Top 10 Strongest Sectors).  Also note that it was written on 1-1-13 before the large gap up this week; not with any hindsight.

So for the time being I remain “Long” this market trying to stay with the strongest stocks in the strongest sectors.  But . .  This Too Will Change.  Take Care and Happy New Year.  May 2013 be Happy, Healthy and Prosperous for you and your family.         ………..  Tom  …………

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