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The State of the Trend

I guess I wasn't the only one who recognized that the market was in serious trouble at the end of last week. Central banks around the world stepped up to the plate in order to avoid another Lehman disaster and market meltdown. Whether they will succeed this time around is open for debate. I have no doubt, however, that the Fed would like to see the SP500 following its current trajectory for many months to come:

SPX

A closer look at the daily chart reveals that the SPX finished the week with a question mark - tagging in the same session both the uptrend and downtrend line:

SPX

Moving over to intraday data, I'll repeat what I noted last Monday morning on my blog, namely, that the market is likely embarking on an Oct. 4th type melt-up mode.

That has proven to be the case so far, and SPY finished the week precisely on target:

SPY

There is a lot more to say about sentiment, market internals, channels, cycles, etc., and I regularly cover these topics on my blog. For the time being, however, it seems that those at the helm are feeling the heat and are getting serious about trying to avert a repeat of the 2008 market crash. Following the indices with the above weekly, daily and intraday chart framework in mind will tell us early on whether they are succeeding or not.

 

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