The market pretty much churned up through the levels I thought about last week. I was surprised at the strength through 1820, was expecting more selling there but the tape pushed through pretty well.
Are we going to go into an exuberance phase? Are fund managers going to chase hard into end of the quarter for march? We’ll see..
Some excellent articles from The Reformed Broker over the last few days, I highly recommend a read when you get chance.
We almost tagged the all-time highs on friday so I expect a test of that on tuesday then some kind of rejection. The tape has been up almost in a straight line for several days. I can see chop between 1846 and that key 1820 level all next week especially with a holiday effect and options expiration on friday.
Here is daily /ES mini futures chart for March at close of friday.
As you can see we are hitting into that supply from January which led to that mild correction. The snap back to this 1830-1840 level was pretty rapid which makes me think that it is only a matter of time ( couple of weeks? ) before we head to new highs, we’ll see how this plays out..
On another note, i was watching Apple ( AAPL ) like half the world’s population last week, the price action is incredibly bullish and the stock has basically ran almost back to it’s pre-earnings price. There is a small gap left to fill at 550 and that is right on a significant trend line. Given the amount of stock buyback occurring here with potential catalysts down the road, i only think it is a matter of time before this downtrend is broken and the stock resumes up, i am currently targeting about 620 or so for an exit but the stock has the potential to go much further >IF< they valued the stock more 'fairly'. It's not quite apples to apples as it were. Here is a daily chart on the stock clearly showing the trend line, a failure and rip down back through 500 could be fairly painful with target down at the 200ma. Anyway, i am still on the bull camp with this until the charts tell me otherwise. [caption id="attachment_133" align="aligncenter" width="300"] Apple ( AAPL ) Daily chart Feb 14th 2014[/caption]
And finally another stock i’ve been slowly accumulating over time, this is more of a buy and hold. I love a good basing pattern over a long time after a huge sell-off. The stock is Veolia ( VE ), it is a water stock, one of the largest in the world and in the midst of a turnaround on a fundamental level. They, like a lot of companies were up to their eyeballs in debt into the 2008 crash and they got smoked from 90$ down to around 9$. Given all the crazy weather and climate change going on ( droughts in california, huge snow storms east coast, floods in the UK etc ), i think stocks like this may perk up for various reasons. They pay a decent dividend but it is only annually and of course the French love their taxes so you lose about 25% of that when paid. That said, i’m not buying this stock for the dividend, more for a potential move back to 40-50$ in hopefully a few years. They have apparently halved their debt over the last year or two and will report soon so that will provide clarity on whether my thesis is on the money or not.
Here is a multi-year weekly chart, showing considerable support around this 9$ to 15$ level. The 200weekly is coming down to around 18 or so with a significant trend line around 22, i think if the stock can take that out then we have a fair shot to 40$ to 50$.