Weekly Bars

Interesting close to the week.  Only two weeks left in the year, think they can hold it up for that long or are we due for a correction?  Things certainly look to be getting heavy on the upside.

All weekly charts are showing bearish candle patterns.

The SPY showing a key reversal bar (though it is lacking in range); Higher Open, higher high, closing down and below the previous candle's close:

DIA - printed a shooting star

QQQQ - Hanging man with a high 33-cents shy of the '07 highs

SMH - hanging man type candle with a lower low, lower high, higher open with a lower close than the previous close.  The real body actually engulfs the previous candle's real body:

IYT - Transports putting in a key reversal bar, with a real body which engulfs that of the previous bar:

Meanwhile, the VIX tested a low not seen since April '10.  A good time to fade the move into support?

TICK

Looking at the SPY ETF combined with the NYSE TICK and noticing some interesting divergences these past few days

First the Daily

Over these last 8-days we have had two positive divergences (lower low in price which registered a higher low in TICK). These divergences were combined with a hidden divergence where price formed a higher high on a lower TICK reading

While this morning, what appeared to be a sell-off ended up being a bear trap with higher TICK readings on lower price:

rounded top?

Who out there considers this to be a rounded top in the SPY?  Remember, a rounded top can break out in either direction!  Vote now!!
If I don't get more than 10-votes I'm closing this blog and nuking the contents....tick, tock, tick, tock...

GOOG

Interesting development in GOOG lately.  Price has closed under the daily Open for the past 7-days straight, all while closing higher than the previous day!?   Seemingly drifting along the midline of this pitchfork.

Over the past two months GOOG has retraced as much as the 61.8% mark, and sits above it's 50%.  There's a lot of clear air above and below price right now.

Should price explore lower from here after recently failing this steep trend line, the first stop-trigger level may be around the $585 mark.  I'm looking towards that $578 mark:

LOL Fed Day

The SPY closed above the previous day's close. 

Which has been the case for the past 6-days.

It's almost as if the market needs to close this way for a specific reason. 
The end of day hammer candle, was it mostly short-covering or buying??

waning breadth

A few observations throughout today's session.
Negative TICKs far outweighed positive TICKS considering we were at over 2-year highs.  Also of note is the fact that we gaped up yet again on a weak positive TICK.

The advancing vs. declining issues were trending down all day long

While the Up-Down Volume did get bullish, but again diverged from the previous two days

TICK this week

Was dusting off an indicator that I stopped using for some unknown reason and was just looking over the past few week's performance in pairing it with the SPY.  The indicator (found hear) brilliantly cleans up an otherwise noisy, and distracting, NYSE TICK. 
Over the course of the past month what do we see?  Surprise, surprise!  Participation on the sell side with seemingly very little extreme upside TICKS.

 Perhaps all the juice needed came on the 29th of November (extreme +TICK in ellipse).

It's all very simple in hindsight.  The most recent lows (Nov. 16th)  were made on an extreme TICK followed by a divergence.  Since that point the lows (in price or the TICK) didn't go any lower.

The following are just a series of charts with some TICK/Price divergences.  It's likely I may have missed some, but I'm putting these up simply because they are helpful to study.

The charts which follow overlap in date from the ones above, but I wanted to show some in a little closer detail.  Also, I added a Fib. retracement based off of the first half of the day's High-to-Low range.  When it comes time to positioning oneself for the close of a market, it could be as simple as realizing whether you're trading in the top or bottom 50% of the day's range.

There's a glaring "hidden" divergence in the chart below that is not illustrated, telling you that though TICK has made an overly dramatic lower low, price made a higher low, leading to a buying opportunity.

Healthcare sector lit up

CYH's bid for THC brought some attention to the XLV this past week.
Currently XLV is down 1.5% for 2010 (the most lagging of the 10 most tracked sectors, followed by Utilities, XLU and Financials, XLF).

weekly charts showing all sorts of inverted H&S patterns with an overhead neckline:
XLV -Could have a breakout move in the week ahead

CYH, of course that big move all happened in one day though-

THC again, a one-move wonder on Friday-

While other components of the XLY show some promise.
A lot of clear air above for UNH

MRK - broke out from this W-bottom pattern and looks to try to regain $36.50 support

AMGN - formed a hook (seed wave) with what looks like a breakout candle on Friday

PFE is interesting.  This weekly chart shows a large amount of volume over these past two years.  While price recently broke out of and re-tested this LONG-standing down trend line

Utilities lag

The Dow is still under it's previous swing highs (perhaps the one thing preventing this market from really taking off)

Transports have been chugging along, closing just under the selling wick of Tuesday

The Utilities however,  are in the process of pulling back from a test of previous swing highs:

There's something within Dow Theory regarding the agreement of these three components (Industrials, Transports, Utilities), so it's curious to see how it will all play out.
The laggard (Utilities) is within the top portion of a down-sloping channel, where it looks to be at a potential breakout point

Price has made a little hook (seed wave) these past few days, which could trigger a long entry, but how much resistance the overhead 50-day MA puts up will be very telling as to whether these 3 components begin to gel.

setting up for something

SPY intraday has formed an inverted roof pattern

 Patterns within patterns.  These intraday inverted H&S patterns never achieved their measured moves.

Whichever direction it breaks out, the measured move comes out to about 1-1.5%

some pitchforks

GOOG....resistance at the midline

NFLX - most recent momentum impulse, didn't quite tag the midline

XLF - squeezed back inside and looks to be wearing out on this second test of a gap

AMZN - broke it's midline this morning

SPY - just can't seem to make it back to the sliding parallel line, try as it might

DIA - never tagged it's midline.  Is this a double top waiting to be resolved, or a pause before popping back up to the lower median line?  The key reversal day was telling everyone to take profits, but downside has been delayed so far.

Nat.Gas

Going back to 2005 Natural Gas has lost up to 87% of its peak "value".  While there was a ripping rally (a 32% rally!!) for the first 6-months of 2008, it has sold off another 80% since the peak of that last rally.

Currently, price is rounding once again (more gradually than the '06 - '08 selloff as well).

While it may not have "bottomed" at this point this rounding behavior is at least displaying a slowing pace.  There's also the added interest that price has completed a 50% extension of it's original momentum move.

This channel is displaying the rounding of price taking place:

It will be interesting (perhaps telling) to see how price responds to the most immediate resistance level overhead within this channel:

While on the daily, price is building another inverted roof type pattern.  This could turn out to do a few things; it can break out from here and attempt a measured move, it can retrace lower to form a Right Shoulder, it can retrace up to 100% and make a double bottom, or even continue lower beyond the most recent swing low

There may have been similar inverted roof structures previously, but at least the most recent one has had constructive higher lows, unlike the previous moves that have been fast without building much value. 

It appears that the Reward:Risk is shifting in favor of buyers down here, so I'm keeping watch for bottoming patterns with volume.