The Price Action Lab Report – Thursday, December 18, 2014 [Premium]

The Price Action Lab Report includes a market recap and premium analysis and it is delivered daily before the market open. The premium analysis focuses on high probability setups in ETFs and S&P 500 stocks. Click here for more details.

Market Recap – December 17, 2014

U.S. stock indexes rallied on Wednesday after receiving expected support from the Fed. The S&P 500 gained 2.04%, NASDAQ climbed 2.02%, the Dow added 1.69% and the Russell 2000 soared 3.11%.

Bond prices fell with the 10-Year Note yield rising 8 basis points to 2.15%. Crude oil prices took a breather with the spot price gaining 0.5%. The US dollar rallied versus the Euro to $1.2329. Precious metals prices were mixed despite the US dollar rally. In the spot market gold fell 0.5% but silver gained 0.2%.

Comments: A number of overbought conditions in equity related indexes and ETFs vanished yesterday due to the rally. Russell 2000 had its best performance in 3 years  and the S&P 500 had its best gain since October of last year. Bulls may try to move the market higher while overleveraged participants are taking a breather. But uncertainty is still high because this rally could be just a rebound in a downtrend towards a test of the 200-day moving average.  If social unrest starts in Russian due to skyrocketing food prices that will impact stocks worldwide. Therefore, it is important for the Ruble to stabilize otherwise we may have a replay of the 1998 Rubles crisis, as I wrote a month ago in this blog. In case this happens, stocks may drop by 10% or even 20%.

Short-term Technical and Quantitative Analysis

The Short in IYR was closed near breakeven based on the setup change yesterday before the open for a loss of $0.04/share and the short in SMH hit its profit target for a gain of $0.95/share. There are no pending setups and no open positions, as shown on the table below…

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Russell 2000 Had Its Best Performance in Three Years Yesterday

Last time Russell 2000 rose more than 3.1% was three years ago, on December 20, 2011, with a gain of 4.2%, signaling the end of a multi-month correction in the stock market.  While the situation may be different now, the gain was impressive.

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The Price Action Lab Report – Wednesday, December 17, 2014 [Premium]

The Price Action Lab Report includes a market recap and premium analysis and it is delivered daily before the market open. The premium analysis focuses on high probability setups in ETFs and S&P 500 stocks. Click here for more details.

Market Recap – December 16, 2014

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Strong Attractor in Action Pulling S&P 500 Down

The attractor is formed by the 200-day moving average and the 50% Fibonacci retracement of the up move from the lows of October and it is found -2.15% below yesterday’s closing price. If this attractor is tested, the net loss of the S&P 500 from its highest close will be about 6.3%, a good size short-term correction.

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The Price Action Lab Report – Tuesday, December 16, 2014 [Premium]

The Price Action Lab Report includes a market recap and premium analysis and it is delivered daily before the market open. The premium analysis focuses on high probability setups in ETFs and S&P 500 stocks. Click here for more details.

Market Recap – December 15, 2014

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