Piercing line reversal for S&P (C fund)

[twodaystocks]

The US stock markets opened higher today, led mostly by hopes for the Fiscal cliff and a 2.1% jump in October home sales. The C fund which matches the S&P 500, looks to be forming a piercing line reversal on the weekly candle. If this follows through, and finishes 50% higher than the base of the previous candle, it is a strong sign of a reversal in the markets. The same candle formed towards the end of 2011 and the markets rallied hard for the next 4 months, gaining over 20%. It also formed towards the end of June and the markets surged over 15%. I am not a buyer yet, but I am watching this chart very closely.



I would like to hear some feedback on this chart and/or the market in general.

 

[tsptalk]

I would like to hear some feedback on this chart and/or the market in general.

I think this needs to be bought. The recent low would be the stop so the risk / reward is not too bad. The higher it goes the more someone will want to wait for a pullback, and eventually might feel a need to chase or miss out. Seasonality is good this week. If this turns out to be a dead-cat bounce, you'd sell a new low and take a small loss.

 

[JTH]

I think this needs to be bought. The recent low would be the stop so the risk / reward is not too bad. The higher it goes the more someone will want to wait for a pullback, and eventually might feel a need to chase or miss out. Seasonality is good this week. If this turns out to be a dead-cat bounce, you'd sell a new low and take a small loss.

I'm interested in the close, those last few candlesticks.

 

[Frixxxx]

Low volume today?

 

[tsptalk]

Yeah, I'd expect low volume "holiday-like" trading this week, particularly compared to last Friday's options expiration volume.

Don't forget about the typical post holiday reversal.

 

[Frixxxx]

Yeah, I'd expect low volume "holiday-like" trading this week, particularly compared to last Friday's options expiration volume.

Don't forget about the typical post holiday reversal.

Hence why I miss the old IFT rules......This frustrates me to high heaven!

 

[twodaystocks]

I hate the IFT rules. 2 per month and the are a day behind? That's ridiculous. I wish, and I'll keep saying it, the TSP would give an "inverse" fund such as DXD or SDS. I guess I can't always get what I want.

 

[MrJohnRoss]

Good post. Also take a look at AAPL. Talk about a piercing reversal!

This was a huge day, no question about it. My guess is that we'll have a few days to digest this move, and will eventually re-test the bottom.

The Nasdaq had a big gap up, which will want to get filled.

I'll be watching closely as well, but will be forced to remain on the lilly pad for the rest of the month in my TSP, as I've burned my measly two IFT's, but if this market shows additional strength to the upside, I'll consider putting some cash to work in my other accounts.

Good luck!

 

[twodaystocks]

Good post. Also take a look at AAPL. Talk about a piercing reversal!

This was a huge day, no question about it. My guess is that we'll have a few days to digest this move, and will eventually re-test the bottom.

The Nasdaq had a big gap up, which will want to get filled.

I'll be watching closely as well, but will be forced to remain on the lilly pad for the rest of the month in my TSP, as I've burned my measly two IFT's, but if this market shows additional strength to the upside, I'll consider putting some cash to work in my other accounts.

Good luck!

Yea, AAPL has incredible momentum when it gets going. I think the 20% pullback the past couple of months has given investors a great entry point. Not a bad profit back up to $700 and beyond more than likely.
IMHO, I think, unless there is positive news, the markets won't move much more than they already have. I agree with you, they will come down again soon to test/retest their lows and possibly lower, depending on what the pres and congress have to say when they are back in session.