Erin Swenlin's Blog

The headlines will continue to be filled with 'fiscal cliff' fears, so we're not sure what positive possibilities are even out there that might spur a rally, it all seems negative. This negativity that is settling over the business world is translating into investor fear and probably more market decline.

As New York City and other parts of the northeast begin to recover from the hurricane, the market may have started its own recovery. It opened up and stayed up the remainder of the day.

Until the election it is very likely that we will see the market confine itself to this near horizontal trend channel. Ultra-short-term indicators are overbought but not at extremes and short-term indicators clearly have plenty of room before they even reach overbought.

Short-term indicators are in overbought territory. Sustainability of this rally is still questionable given that the big one-day moves this week and last week have been on somewhat manufactured news out of the central banks, but I think a breakout on the weekly chart is very encouraging.

The market is not acting like it is ready to bottom despite yesterday and today's last minute price saves. The last top didn't quite make it to overhead resistance and caused a bearish ascending wedge.

The market trickled up today after suffering a steep drop yesterday. We saw climactic behavior on a few of our ultra-short-term indicators yesterday, so we suspected we might see a baby bounce.

The market opened higher and then fell apparently amid concerns about Spain this time. Prices did recuperate midday so stocks closed near the high for the day. I keep feeling bullish about gold and then it disappoints. Today prices were lower and now we have a corkscrew or coil. Overall the pattern is still in a declining trend since the January "breakout".

Today's big news... We had an intermediate-term neutral signal generated on our Thrust/Trend Model for the SPX. The 20-EMA crossed below the 50-EMA today which was the trigger. It was not a sell signal because the 50-EMA remains above the 200-EMA which means we are technically in a long-term bull market still. You don't want to go on a sell signal in the midst of a bull market.

We are seeing the market start in a new consolidation trading range defined by the bottom of the double-bottom and the 2012 market high. It may require some more chop to alleviate overbought short-term indicators.

With European markets up and the release of more positive earnings news, the market opened up, rallied to midday and consolidated from there to the close.