Wednesday, 27 August 2014

Still clawing to the upside

It was just another day of upside (if moderate) for the US equity markets. With a three day holiday weekend approaching, trading volume remains especially light, but then, that will merely favour the equity bulls.



So.. with continued gains, we still have a second consecutive green candle on the weekly cycle. Upper bollinger is offering the 2020s in the immediate term, although that seems unlikely until after the 3 day weekend. By mid September, the weekly cycle will likely be offering the 2030/40s.

New high for the Dow

It was only late this evening (its hard to keep track of everything!) that I noticed the Dow had broken a new historic high of 17153. The monthly candle on the Dow is now also a clear bullish engulfing candle...

Despite a lot of bearish chatter out there, a bullish engulfing candle is something to be taken very seriously. Right now, we also have one for the Sp'500 and Nasdaq Comp'. Even the laggy R2K has climbed 4.9% this month, and is now just 4% shy of the July high (1213).

Equity bears need to go stare at the above chart for a good long while.. and ask themselves the question ' is the primary trend right now?'.

Looking ahead

There is very little due tomorrow, just some bond auctions and the EIA oil report.

*there is QE of around $1bn, bears beware.

A tentative long position

The indexes look over stretched right now, and I am certainly not in the mood to go directly long any of the indexes. However, the oil/gas driller stocks have started to show some initial upside power, and I decided to pick up a SDRL position this afternoon.

As usual, I try to 'clear the decks' into each weekend, and will look to drop SDRL this Friday, not least since its a 3 day holiday weekend.

Goodnight from London