Equities Float Higher On Low Volume After Irene

As predicted last Friday and over the weekend, Irene has not had a negative effect on the equity market as many analysts had concluded. Manhattan had some outages and most big fund managers flew to Florida late last week, meaning that today only 170M shares traded on the SPY as the market strolled higher for 2%+ gain across the board. The SPX rallied above the highs of last week and paused only at the very end of the day where it found resistance at the $1208 pivot high.

The S&P closed at $1210 which is above the 20 MA and the pivot high of $1208. There appears to be some more upside in the market but given the light volume, just a close above the 20 MA and the pivot high is not enough to buy the market unless it can confirm tomorrow. I do think we’ll see a pullback tomorrow but if that is not the case then $1220-$1240 could be in play by the end of the week especially if volume continues to dry up (which should be the case anyway towards the end of the week).

Also, I’d like to address a news story that I have heard other buzzing about. If you haven’t read it yet, it’s about how bankers are predicting a market crash within weeks.

This whole article sums up my general sentiment on the market, or rather the inverse. Here you have it from the horse’s mouth: buy the market. In my humble opinion, the banks are currently begging retail investors to short the market so they can push it higher into the holiday. The amount of negativity out there has worked well as a contrarian indicator for my analysis recently and this article is more or less the epitome of what I’ve been talking about this whole time.

So now that I’ve gotten that off of my mind, have a great week and stay dry for those of you in Manhattan.

Advertisements

About Aaron Basile
Market Technician, Equity/Commodity Trader, Austrian Economist, Contrarian Investor

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: