Saturday, October 4, 2014

Oct 4 - Intermediate term long

The confirmation of the reversal yesterday clicked into a repeating pattern for $SPX.  Bounced off 120 day MA and looks bound to continue up.  Daily buy signals across the indices.  Only negative is we have closed right at declining trendline resistance so a 1-2 day pullback is quite possible here.  Otherwise, looks like for some indices such as $RUT, $NYA, and the DOW is has been a bear trap, breaking support only to reverse back up.

Something to note down the line is the increasing divergence between SPY/ IWM.  Assuming this rally does what it is setting up to, it will be interesting to see whether IWM can rebound here and catch up.  If not, this could mean a bigger slide on the next downturn.

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