![]() ![]() ![]() |
|||
The Raging BullsJoseph Russo MARKETS AT A GLANCE
- INDEX TRADERS EDGE Vol. 1 ![]() The surge in equity prices from March appears driven by a healthy dose of animal spirits. Of late however, neither momentum measures nor sound fundamental metrics appear plausible enough to account fully for the unprecedented two-month rise in prices. It is clear that some form of exuberance is taking hold of equity indices. As the US Dollar gasps for air, equity markets continue to press higher in a raging bull market that is historically over-extended, overbought, and extremely mature. That said - one must be aware that equities are subject to another February-like decline without any particular notice. ![]() Despite such imminent prospects, the recent buying-panic in select indices may well persist for much longer than one might assume. Once the surge abates, rather than a sharp decline, Act-II may bring with it a sideways levitation, serving to work off extreme overbought conditions, and perhaps introduce prospects for a summer consolidation. In either case, it is advisable that one stay tuned for the new fall season. LAST WEEK'S SHORT-TERM
NAVIGATIONAL GUIDANCE ![]() Our short-term guidance rolled into last week's trade from the long side. Our bullish stance arrived courtesy of a buy-signal issued against the previous Thursday's May 10 low of 1874.24. The day following this signal, the NDX opened with a 3-point gap-up, and settled the session 23-points higher on the day. As such, we began last week on a rather profitable note. Monday,
May 14 - Pre Open Report In the form of a trendline break (TLB) carrying a minimum downside reversal target of 15-points beneath its breakdown apex, we graphically illustrated how and where the first sign of such failure would manifest. Monday,
May 14 - Opening Bell Upon the hard-down reversal, the market tripped beneath our resting (TLB) apex at 1896.07, electing a SAR (stop and reverse) sell-trigger, prompting short-term traders to take profits on longs and reverse to the short side of the market. Thereafter, not only did the market retract all of Monday's gains, but also erased all of the gains amassed from the previous Friday as well. The NDX hit an intraday low of 1878.63 (a 27-pt intra-day reversal) before settling the session at 1885.58, down -16.08 on the day. ![]() Last Monday's report also mentioned the likelihood that there was fair potential that such a rally failure would likely engender a bout of choppy trading dynamics short-term. Wednesday,
May 16 - Pre Open Report Wednesday,
May 16 - Opening Bell Thereafter, from Wednesday's intra-day low of 1866.98, the NDX mounted a robust 24-pt rally, ending the session at 1891.57 near the highs of the day. Friday,
May 18 - Pre Open Report Friday,
May 18 - Opening Bell INTRA-DAY SNAPSHOTS
FOR THE WEEK AHEAD Bear in mind that such price path projections are by no means forecasts. Such projections do not in any way to reflect our branded market guidance, nor are they to be interpreted as trade recommendations of any type. The intent of such projections is to provide advance consideration for one or more plausible paths residing amid a much broader range of variant outcomes.
![]() ![]() The Near Term Outlook delivers unrivaled short and long-term forecasting guidance for the U.S Dollar, Dow, SPX, Gold, HUI, and NDX. The concise, impartial market guidance, consistently present throughout this publication, provides clear targets, triggers, and variant parameters from which active traders can successfully construct low-risk trading strategies. The long-term rewards in adopting such guidance as part of one's trading arsenal are quite substantial, and well worth the risk. In closing, we wish to remind readers that the rigors and discipline we employ in delivering such guidance is by no means arcane. Our methodology is fully transparent, and clearly translated, providing a lifelong benefit of advanced trading skills to each of our clients. We do not predict prices, nor are we ever tied to a fixed bias or singular perception; instead, we adapt to the price action as it unfolds. As evidenced in reviewing our prior week's guidance, the competitive edge is most notable. Trade Better / Invest Smarter... May 18, 2007 |