The North American equity markets, including the bellwether SP500 index have nicely absorbed the large gain in global stock indices made last Friday. We discussed this in detail in our past weekend post.
Also, after a large SPIKE day up, or any day that takes out an important price level (support or resistance) another good forensic clue in forecasting, is to closely watch for price retracement or pullbacks.
So far, after two full trading sessions, the indices have given back very little. This is not only unusual - it is indeed bullish.
So although markets made need a little more time sideways, we are remaining with our BULLISH plan and posture.
Tonight, we have also included two important charts, that were included in our paid subscribers update.
1. The BKX or USA bank index (as below) incorporates what is known as intermarket analysis. This in an attempt to verify our bullish viewpoint in the general indices, by using so-called add-on analysis as first taught by John Murphy in his famous book (highly recommended) "Intermarket Analysis". As one will witness by the chart comments we made, this is confirming our bullish equity SP 500 index view.
2. Secondly, using the NYSE TICK (as below), we have included another method of confirmation by specifically looking at the NYSE market internals for confirmation. Again, TICK tends to at least partially support our bullish view.
In summary what we are teaching in this update, is that your financial analysis skills (and technical analysis in this case) will always become vastly more powerful and potent - when you learn to use the confirmation principle.
The charts also contain many learning comments for technical analysts. Enjoy.
Trade the trend since after all; trend is the only true market ingredient or causal factor that makes one a profit, or a loss if you go against it.
For now, the trend in our viewpoint looks decidedly bullish.
Regards,
James Kelly Sr.
Editor in Chief
www.KRTT.com
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