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Market Off High Channel – Not Much Selling or Buying December 14, 2013

Posted by Tom in Thoughts.
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Happy Holidays to All –

Looking at the chart below we note that the broad market NASDAQ Composite Index came off of the higher channel line (upper purple line) and made its way to about mid-channel.  We’re at the 3995 level which could be a good place to hold and mount a rally, with the next support level is around 3905 (dashed line) and we could very likely head that way.

NASDAQ

chart courtesy of MetaStock; used with permission.  click on it to enlarge.

Certainly it is possible for a re-trace to the lower channel line, but I’m kind of doubting that.  IF we were to get any tax selling at the end of the year I’d expect it to begin this week.  With the FED meeting coming up there could be an excuse, especially if the inevitable tampering begins.  The histogram indicator (in red) above the price chart pretty much tells the story of demand falling off, but note the volume below the price chart, steady to lower; not much selling activity either.  This looks like “blah” prices . . . falling due to lack of buying.

I’m hearing that many major players in the market have basically called it a year and are either hedged out (a synthetic Cash position) or are just holding what they have.  If that’s true we should see a steady decline in volume over the next 2 weeks.  I just get the feeling that the market will close out the year steady or slightly up; I could be wrong.  I just don’t see much of a reason to exit this thing in the longer term, broad sense.  Let’s see how the institutions react to any FED news, and see if it’s more that just a one time / afternoon reaction.  That will give us an idea of how they are positioning themselves for 2014.

Until then . . .  steady as she goes.  Have a good week.              ……………..  Tom  ……………….

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