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Market closes positive for the week!

Author: Varun Kanotra (info)
Website: http://www.targetsix.com/
Posted: November 11th, 2006 at 3:11 pm EST
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So the dems won huh! Doesn’t look like the market really cared much. In return, it built up more momentum to the upside. The NASDAQ (btw…my personal favorite index, the NDX) is fighting the 52-week highs again. Look at how the index bounced off beautifully off the 30 ema:

You see, if the market was really ready to change the strong uptrend, it would’ve happened when it dropped below the 30 ema on the chart above. But it didn’t. Instead, it buckled up and went straight up (ok…almost straight) for the highs and closed right around resistance. This re-test is certainly scary for the bears as now the market has more upbeat momentum which would make me want to expect to see higher highs (being careful that I don’t speculate here).

A lower close below 2,325 is the only way I see the NASDAQ changing the intermediate term trend, which will require it to close below the 30 ema AND take out the congestion zone around 2,335 AND take out the lows around 2,325.

So, what do you think the NASDAQ is more apt to do? Take out the immediate resistance its at or be shredded into pieces like Mr. Buster from the Mythbusters! (if you don’t know what I’m talking about, check out the show on the Discovery Channel….wednesday’s at 9 pm ET)

Anyways, back to our beloved NASDAQ. If you take a gandet at the weekly candles on the 5 year chart, you’ll notice that we have already puctured the 52-week resistance once and made a new high. Is the market tempted to continue pushing and making higher highs?
We will find out next week, FOR SURE!

Not to forget, next week is LOADED with earnings and economic data. Let me list a few of the market moves for your convenience:

ECONOMIC DATA
Tuesday, Nov 14th 8:30 am: PPI
Tuesday, Nov 14th 8:30 am: Retail Sales
Thursday, Nov 16th, 8:30 am: CPI
Friday, Nov 17th, 8:30 am: Housing starts

EARNINGS
Tuesday, Nov 14th (bef. open): HD
Tuesday, Nov 14th (bef. open): TGT
Tuesday, Nov 14th (bef. open): WMT
Thursday, Nov 16th (aft. close): SBUX
Thursday, Nov 16th (aft. close): DELL
Thursday, Nov 16th (aft. close): HPQ

So, a lot going on next week. Wait, on top of all this, ITS EXPIRATION WEEK PEOPLE!

Let me follow-up on some trades:

AAPL: 86.40 is the ALL TIME HIGH for this MAC and iPod maker. While I share my frustration with operating the MAC with the 90+% of the consumers out there dominated by Microsoft, I like this stock. The stock is a little over 3 pts from its all-time high. Could there be a fight on this one soon? Sure. Could it care less and continue pushing higher into the holiday season? Absolutely! As always, keep those stops on, eyes on the chart and ears on the news!

GOOG: Here are the weekly candles on this monster:

See something? Yep. A whole lotta indecision. While its true that the market is still absorbing the amazing numbers posted by GOOG in the past quarter, wouldn’t you expect the stock to keep moving without much head wind? I would. Google’s consolidation is overdone now. This beast is ready for another big move. Let’s see if next week will help shake it (or should I say wake it up) a little and push it higher. I will be picking some up soon.

PD: Ouch. That was a bad day friday. This stock is sitting on some delicate support right now. A break below that would make me want to short this one short term..lol
Here’s the 5-year look:

While it didn’t surpise me to see a bounce off resistance, it does have multiple areas of support coming up. This one might not be a bad Iron Condor play for december. The ascending wedge should consolidate tightly atleast for another 3 weeks or so.

XAU: The Philly Gold and Silver Index is looking like it’s ready to break out: one way or another. Here are the daily candles:

The PPI and CPI numbers should be more telling next week on inflation. That should have a direct impact on how the XAU behaves. I am not going to speculate here, this one could go either way. The december 140 straddle is going for a $12 net debit.
One comment I would make though (which will sound like i’m learning more towards a downside break-out) is that we’ve seen a series of lower highs on the 1 year chart. So that gives the chart a higher probability to break to the downside. That could happen if we come out with bull-favoring economic numbers next week and the market starts to rally.

OIH: The oil holders trust seemed like had a break-out of the downward trending resistance line but then fell back to close inside of it on friday. This one is interesting. The next couple of days will help the ETF get much better direction. Again, the chart is leaning more towards the downward action with one unsuccessful break-out to the upside. Here’s the chart:

The ETF has gone up the last 5 trading days on pretty much the same volume (65 million shares). This is not indicative of strong buying in the ETF. We will see what happens next week.

So, a lot going on next week. We should see some great volatility in the market and probably a better sense of direction.

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