Special Risk Capital Management LLC

Market Stalemate September 19, 2014

I’ve been sitting at the computer all day today doing research and testing on one of my portfolio models so this will be short.  I’m tired.

What do we see in the chart above?  Well the first thing is the very high volume, but let’s discount that since this was the “3rd Friday” of the month which is always options expiration (artificially high volume).  On Monday we got our close below 4545, the lower dashed blue line, but then we bounced back right to the upper resistance line (4610).  That close below 4545 was the yellow flag that we were looking for, but absolutely no follow through afterwards.  False alarm?  Well so far yes but let’s keep that level active for awhile.  I’ve also placed the 4500 level (dashed purple line) on the chart . . . perhaps a secondary “drop dead” level.

Both volume and Money Flow are level / average so not much to signal a change here.  It just looks like the markets are looking for an excuse to move one way or the other and we’ll have to wait on that.  Market Sentiment continues to be somewhat negative and my market model remains neutral overall.  Sectors are relatively neutral with the exceptions of the Rising US $ (going up) and precious metals headed lower.  Biotech/Pharma/Healthcare are “OK” and China has bounced back a little; nothing really is standing out.   Not much else exciting to talk about so we’ll call it a week for now.

Have a good week and watch these levels for signs of a breakout in either direction.    ………..  Tom   …………

chart by MetaStock; used with permission; click on chart to enlarge