The State of the Trend

By: George Krum | Sat, Jul 20, 2013
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Two weeks ago we concluded that once the May 20th gap zone is filled, the race to the old highs will be on. That race was won by the Russel 2000, which printed new closing highs in four of the last five days:

The SPX finished the week with a textbook inside day, and presents us with an interesting dilemma: on the one hand, the daily fractal which provided us with clear guidance during the last 10 trading days is suggesting that higher prices are right around the corner,

while on the other hand, the seasonal pattern which the index has followed dilligently all year long, is suggesting that there's another speed bump coming.

Market breadth indicators present us with conflicting signals as well. While daily market breadth is approaching oversold territory:

the weekly indicator is nearing overbought levels:

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Forunately, the inside day mentioned in the beginning leaves us with little room for interpretation. We'll remain bullish above 1694 (basis the SPX), neutral between 1671 and 1694, and will turn short-term bearish below 1671.

As for the Qs, a deepening sign of trouble will be a penetration and a drop below the July 11th gap zone:

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George Krum

Author: George Krum

George Krum

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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