The State of the Trend

By: George Krum | Sat, Jan 21, 2012
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We started 2012 by observing that we probably won't have to wait a long time to see whether the market will continue on a bullish or bearish path. The choice was made right on the first trading day of the year, and the SP500 has been trending up ever since. This establishes a new monthly trend channel with a more sustainable slope:

In addition, the trend indicator we introduced two weeks ago remains up in all three time frames - daily, weekly and monthly. So what can go wrong?

Well, for one the Q's are bumping up against long-term monthly resistance once again, and since they are the leading index, we need to keep a close eye on them for signs of break-out or failure:

The weekly OEX, NDX and DJIA indices, have been overbought long enough to flash a warning that a reversal may be imminent:

And lastly, January 20 is the date when both my bullish and bearish seasonal forecasts for the SP500 turn down.

In summary, absent a clear break-out above resistance from the Q's, now is not the time to be complacent.

 


On that cautionary note, I'm happy to announce the upcoming release of a new member of the OddsTrader family of apps - OddsTrader Trend. OT Trend will help users discover the hidden rhythm of the markets, and quantify the constant ebb and flow of seemingly random market action.

 


 

George Krum

Author: George Krum

George Krum
www.citdates.blogspot.com

George Krum is the author of the "CIT Dates" blog, and the following apps:

OddsTrader - combines the power of Hurst Channels with proper risk and position size management. For a web version see OT Signals below.

Gann 9 - the only financial app that allows users to effortlessly apply the legendary W.D. Gann's tools and methods for trading (including the Square of 9).

OT Trend - helps you quantify and forecast the seemingly random ebb and flow of stock, index or mutual fund movement.

OT Fibonacci - automates the process of applying Fibonacci numbers, ratios and time series to any security.

OT Seasonal - allows you to perform seasonal analysis on practically any security from around the world, and to build long-term forecasts and models.

OT Pairs - pairs trading, one of the most successful hedge fund trading strategies, is now available on your smart phone.

OT Pivots - combines the power of pivot lines with cycles to provide you with concise technical analysis and powerful trading signals.

OT Signals - a web app accessible from any browser, tablet or pc. It gives buy/sell/hold ratings for any instrument from around the world, and defines the trend and support/resistance levels.

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