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I hope you
fellow Canadians had a great Canada Day long weekend and Happy Independence
Day to those south of the boarder!
A couple weeks back on June 19th I
posted my analysis on how the stock market was bottoming and that we needed a
couple key sectors to participate before we would get a solid bounce. You can
quickly review the charts here if you like: http://www.thegoldandoilguy.com/articles/stoc...g-a-buy-signal/.
Today's report plays directly off the
June 19th analysis showing you the price movement from then on.
SP500 - SPY ETF Daily Chart
As you can see during early June the
market became volatile with a broadening formation. This type of price action
is an early warning that a trend reversal is near. It was only two days later
when we saw stocks make a new high, which is the first ingredient for a trend
reversal to take place. But once a higher high was made sellers quickly
jumped back into the market pulling price back down. Keep in mind the higher
high which was made was another early sign that a trend reversal was likely
to happen.
During this time I was watching the
charts like a hawk keeping a close eye on the time and sales window which I
have filtered to show me only orders with a market value of $3million dollar
or larger. This helps me keep a close eye on what the big money players are
doing... Following their coat tails if done correctly will help keep you out
of the market at times and also gets you in before the masses jump on the
wagon.
The two key sectors I talked about on
June 19th were the Financials and Tech. Both these sectors must move up if we
are to get a decent bounce/rally in the market.
Financial Sector Daily Chart:
By zooming out on the daily chart we
can see in terms of both price and volume that the financial sector was at a
major support level. Also it had just fallen sharply for more than a week
making it oversold and ready for a bounce.
Only a couple days later financial
stocks rocketed 11% higher as expected and the broad market (SP500) posted
some decent gains for us also.
Let's take a look at the financial
sector:
The tech sector was in the same boat
as the financials above... Tech stocks jumped an average 6%.
Weekend Trading Conclusion:
In short, I feel the market has shown
us some decent upward momentum and everything is now at the point where a
pause is likely. I expect some type of pause or pullback in the coming week
and then the market has a major decision to make. Will it continue and start
a new leg higher or roll over and die... That's the next key question/action
about to take shape and I will help guide you through these times each day
with my pre-market morning video analysis.
Chris Vermeulen
Editor, the Gold and Oil Guy
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