Last week was a very interesting week. We were looking for a trend to develop since the charts were telling us there was a lot of conflict.
Here is our weekly percentage chart for all three key markets. The S&P is still leading the way in being more bullish then the NASDAQ and the Dow. However, notice the Dow broke through a couple of support lines whereas the S&P bounced off it’s support line. Therefore, the percentage weekly chart is showing S&P is more bullish then the Dow. If you were trading the S&P stocks, you can look for bearish opportunities in the Dow to hedge your portfolio.
Below are the weekly charts for the S&P and the Dow. Both are still bearish. However, notice the S&P closed ABOVE the Kijen Sen last week whereas the Dow didn’t not. The 1390.28 Kijun Sen value is going to be a strong support now for the S&P long term. Notice, the volume that was “registered” last week. It was extremely low. Therefore, the positive week last week may not last since volume decreased drastically.
Below are the daily charts for both the Dow and the S&P. Both show bullish but they are in a pull back mode. If the pull back occurs too drastically then the bullish momentum on the daily will be gone. From the daily S&P chart, it can be seen that if the price crosses above the Kijun/Tenkan Sen then the pull back is possibly over and it may continue to the upside. We will have to watch what happens around 1406.66 for the S&P.
In conclusion, there is still a lot of confusion where there are no direct long term trades for the S&P and Dow since they are NOT TRENDING. However, you can play this market indirectly by finding Daily bullish Ichimoku trends for S&P stocks and Daily bearish Ichimoku trends for Dow Stocks. This will create a nice hedged portfolio.
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