I analyze macroeconomic issues from a fundamental perspective, and I analyze market behavior from a technical perspective. Original macroeconomic analysis can be found here and both macro analysis and commentary can be found on my Caps blog. If you like or appreciate my analysis, please add yourself to my Following List

Friday, December 23, 2011

Dec 23 - Happy Holidays!

First: Happy Holidays! I hope everybody reading this has a wonderful Holiday season.

Second: Some analysis.

I continue to see this move as bullish for several reasons.

1) The daily chart setup continues to be valid

I am referring to this study: Dec 8 - Daily Cycles, Looking for an Edge. This setup continues to be valid and the last 3 days has made the setup appear to be more likely on my daily indicators

2) 60-min statistics are very compelling

As I said on Tuesday a 60-min buy was issued. Today I got a confirming signal from one of my secondary indicators. And this has happened in a very specific way. I ran a study on my cycle system and since 2001 there have been 67 similar setups and 93% of them led to higher highs (typically several percent higher). Again, these are stats not predictions, but it is a very compelling stat.

3) Very bullish seasonality for not only the week before Christmas but especially the week after

See: http://www.bespokeinvest.com/thinkbig/2011/12/23/market-performance-during-the-last-week-of-the-year.html

4) Closed above the 200 day MA

This is a nice confirmation for point 1 above and a bullish way to end the day before the Christmas stock market break.

5) Closed above the downtrend line

The downtrend line that the market has been unable to breach for the last 5 months was finally surmounted today. And that's not bearish.

Third: Some eggnog ... with a very healthy shot of whisky. Time to start drinking :) Happy Holidays!
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