E-mini Executors: Thoughts on the current market and the week ahead... 11/14

Last week's battle was won by the bulls but the war has yet to be determined. The headlines remain in favor of the bears but the technicals are in favor of the bulls. That is what is creating this war. At some point in the near future I think that we could see a sharp move in one direction. As of right now I am thinking that move will be higher. For all of the bad news that we have seen in the past month(s) the market is not in bad shape.

The Nasdaq (100 futures) remain the strongest market by sustaining trade above their 200 day moving average and at the top part of their yearly range. If the Nasdaq can get above their weekly high at 2408.75 I think that they will make new highs of the year rather quickly (2435.50).

The Dow is also remaining strong. On Friday the Dow closed back above their 200 day moving average and they are now about 720 points away from their high of the year.

This week the S&P (futures, cash, SPY) all held an important test of their 150 day smooth moving average. They all basically had a double bottom at their 150 day smooth moving averages and now are comfortably above it. Although that is bullish action I am still not convinced the bulls are in control of the S&P. The S&P (futures, cash, SPY) are all in positive territory for the year (just barely) and they all look like they want to test their 200 day moving averages and daily down trends. If they can close above their 200 day moving averages and daily down trends then I thinks that the bulls will have control.

The Transports are still the weak link in the chain but they are showing signs of strength. They too (like the S&P) held a test of their 150 day smooth moving average and as of right now they are at their daily down trend and 200 day moving average. If they can close above that area the only thing left for them to accomplish would be getting back into positive territory for the year. If that happens then I think that bulls will have complete control over the market and we could see a nice rally.

If the headlines about Europe's debt crisis can turn positive (not sure if that is possible) I think that the market could be set up for a nice year end rally. If the headlines get worse I will be watching to see if the technicals break down for the bulls. If that happens then I think that we could sell off into the end of the year. If nothing happens and its the same old headlines, then I think that we go higher.

CHARTS

Moving Averages; Black (10 day), Blue (20 day), Green (50 day), Pink (200 day) Purple (150 day smooth avg.). Horizontal Lines; Blue (High of the year), Red (Low of the year), Green (Unchanged for the year, Black (last summers range), Light Blue (Old highs that could be tested)