Stock Market Analysis: 11/10/2009

The picture remains virtually unchanged since yesterday. After a trend day, odds are the market trades in a tight range to close near the open and that’s what we got today. Daily charts only today since the short-term picture hasn’t changed. Yet another sign that this rally may be coming to maturity is that the large caps of the Dow Jones Industrial are now solidly leading the market instead of the Nasdaq or Russell 2000. This is usually what happens at the end of a bull market as investors crowd into the larger and ’safer’ companies instead of the more speculative issues. Given the seasonality factor, it’s looking more and more likely we will not see a significant retracement until sometime next year. Continue to watch the $USD which looks likely to continue lower after that failed bounce. The VIX is also printing a very interesting pattern, possibly a broadening bottom which is not a very reliable pattern to trade as it breaks to the upside only 53% of the time according to Bulkowski. Levels to watch on the SPX will remain 1100 for some signs of a double top, 1125 as a potential new short-term top as well as Monday’s open for downside.

Economic Data: Nothing

Evening reading:

• The will to prepare to win (Trader Feed)
• How would you trade this level (SMB)
• Moody’s says AIG can repay US Government (The Business Insiders)
• Unemployment in the US – 2004 to present (Flowing Data)
• Black Cat in Spider Man 4? (Movie section)
• Chemicals in our food and bodies (NY Times)
• Chocolate Milk may reduce inflammation (NY Times)