The Dow Composite, S&P 500 and the Nasdaq are all setting up beautiful Bull patterns, Inverse Head and Shoulders across the board. I described this for the S&P in my previous post titled At the End of the Day Market Said Buy. There’s still a lot of pessimism out there, and Alcoa (AA) earnings warning contributed. But the internals of the market are telling a different story. This is exactly what we like to see, shorts believing this recent rally isn’t for real, while the internals disagree.
Advancers led by an 18-14 margin on the NYSE, while decliners led 15-14 on the Nasdaq, and new highs-new lows were 81-16 on the NYSE, and the Nasdaq was pretty flat with 57-79, but the Naz is traditionally a laggard anyway. And if you’ve been following my reports for the last several weeks, I’ve been screaming that long-term positive divergences have been setting up. We had some recent pull backs and then shot through resistances and tested them successfully on the backside providing future support.
What is required here is a little patience as these right shoulders form. There will be some pullbacks, but that will be healthy for the pattern and will present buying opportunities. I see the markets and AAPL going higher in the near future. I don’t think it wise to jump in here, wait for buying opportunities and then lock and load. Also, going short has no real future. The more cash you have on-hand, the better. And hopefully you took some off the table and sold into strength today before the AAPL retraction, as I alerted to this morning on the Yahoo AAPL MB. That cash will come in very handy shortly.
Tagged as: AAPL, Bullish Patterns