Steel) THE STOCK MARKET UPDATE November 15, 2012
© David H. Weis
www.WeisOnWyckoff.com dhw@weisonwyckoff.com Tel 617.489.9155
When a market is in a downtrend, I do not like to constantly try to figure out if it
is ready for a rally. But today’s price action in the S&P strongly suggests prices will
indeed rally. The story jumps off the chart. When compared to the last six price
ranges (except for Monday’s muted session), today’s range is the smallest. Note
how the S&P closed near mid-range and only slightly lower on the day. Today’s
range is 43% of Wednesday’s range and yet their volumes are almost equal. This is
an important clue. It tells us the sellers made a large effort to break the market but
buying emerged. That’s why prices did not accelerate downward. The exact same
behavior occurred in reverse on October 17 (see arrow) where the up-range
narrowed and the volume was as heavy as on the previous two days’ up-moves.
On that day, the market encountered supply. Today it encountered demand. As for
how far the S&P will rally, pick a number. Certainly the 1363-1366 area
mentioned last night seems reasonable; however, I think the zone between 1386
(Tuesday’s high) and 1393.50 is more likely. Have a nice weeke