Buy Signal on SPY, Waiting for Pullback on Daily Charts to Higher Lows
The market rallied strongly today. The DOW was up about 190 points before closing up about 91 points. Last Friday I stated that the market was extremely oversold and that I was looking for a 200-500 point rally. The market has rallied over 700 points and is extremely overbought here. SPY closed above the 209.01 level and I now have a buy signal on the daily chart. I am now looking for a pullback on the daily charts in the next 1-5 days, possibly into the 17500-17650 range. I expect the market to make a series of higher lows (2-3) between now and the end of the year. At year’s end I expect the DOW and the Russell to be up 1-5%, the S&P to be up 4-9%, and the NASDAQ to possibly be up double digits.
Gold was up 12-13 dollars on Thursday. Today gold traded around the 1087 level and did not move much. I stated that gold is dead money here. It is key that gold holds above the 1040 level. Gold is in no man’s land. Even with the gains on Thursday gold still did not work off the oversold condition. I am still expecting a pushup in gold, possibly above the 1100 level.
Oil keeps bouncing off the $40 a barrel level. I stated that oil was oversold, and today oil closed above the 41.30 level. I have sell signals on both the daily and weekly charts for oil. I am expecting oil to push up here, possibly up into the 42.50-45 range. I am waiting for the pattern to set up where I would possibly look to go short.