TechnicalThis week, the indices (DJIA 13306, S&P 1437) closed within their intermediate term uptrends [12316-17316, 1298-1878]. But as you know, the big technical event was the S&P punching through the upper boundary of its short term trading range (1266-1422) on Thursday followed by similar action in the Dow on Friday [12022-13302]. This activated our time and distance discipline on both; and at Friday’s close, the S&P has been above the 1422 resistance level for two days, the DJIA one day. In the absence of any retracement, the breaks will be confirmed at the close Tuesday/Wednesday.
This leaves me sitting on my hands awaiting confirmation of this potential break but still somewhat doubtful that it will succeed based on continuing negative readings in a number of breadth indicators including the flow of funds, on balance volume and our own internal indicator.
How to Look Beyond the Obvious....identify trends, use your peripheral vision, and take action.