Markets Poised Like a Coil on a Spring …

They may not be quite ready yet, but there is a growing sense that the markets are coiling on a spring and will be on the move soon … I would say by the end of the year we should have a clear signal.  

  • The OVI for the Nasdaq (QQQ) has been quietly positive for almost three weeks, and there is resistance at 66.37.  
  • The OVI for the S&P (SPY) is modestly leaning that way with a reverse head and shoulders potentially forming as well. 
  • The OVI for the Dow (DIA) has been quietly positive also for the last few weeks.  

Stocks to talk about: 

  • AAPL – At some point the misery has to stop, but it’s not ready yet – at least not in our language, but keep watching.  For now it’s still bearish.  
  • AMZN – can’t yet make up its mind and has made a false breakout in the last week.  That said, it didn’t collapse, it’s just drifting sideways, pending potentially a new breakout.  OVI has been positive for a month.  
  • BAC – forming a bull flag – already broke nicely through 10.00.  OVI has been positive for months, since which time the stock is up over 40%. 
  • BIDU – not so encouraging, despite the last few days’ bounce since its doji on 6th December.  
  • C – similar to BAC with a bull flag forming and a modestly positive OVI.  I’ve been bullish on the financials for several months – just look at the chart since August (including the OVI) and you’ll see why. 
  • F – positive OVI for many months with a price rise too, but choppy with big retracements making it difficult to trade.  
  • FB – we’re going to start including this in the OVI Express40 stocks in the OVI Traders Club charts.  Why?  Because it forms tradeable patterns.  But beware around earnings as this will be a regular gapper.  
  • GOOG – was beginning to look interesting as it looks like a breakout from a mini reverse head and shoulders with a positive OVI for the last 3 weeks.  I’d like to see another consolidation here. 
  • GS – is it a head and shoulders or are we bracing for an upside breakout.  I was bullish on GS in August and September.  A clean break through 121.50 with a corroborating OVI would get my attention again.  
  • JPM – another financial stock looking poised.  Positive OVI for months, right at resistance, good positive volume action. Needs to break the October high and keep going.  
  • MCD – forming a bull flag and could fill the gap if it breaks past 90+.  
  • MS – like GS, is this a head and shoulders or is it about to break to the upside.  Not as obvious looking as other financial stocks, but there is a sense of a coiled spring here, either way.  
  • RIMM – OVI positive since October … since which time the price is up 75%.  
  • WFR – this one’s a punt.  A former glory stock that has hit hard times, but it’s forming a cup and handle above its 200 day moving average, and the OVI, while unspectacular doesn’t go negative.  A break above the September high would be very interesting indeed as the company seems to be reinventing itself.  It’s doubled since June.  

All the best 

Guy 

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