The Sunny Side of the Street

Today's market inched on upward, with the QQQs reaching for the top of the channel box, which lies at 27.54.  The QQQs closed at 26.79, so there's almost another point to go before it touches the top of the box and has to decide whether to stay in the channel and fall back downward, or leap out of the channel and show some strength.  Daily Average True Range is 0.71, and with that it would take two days to get there.  I am expecting that the market will keep on climbing, at least until bombing starts.  At that point the market will stay bullish if Americans see war as saving Iraq from itself, and will turn bearish if it is perceived that we are losing, or if another homeland target is hit.

The Dow, too, inched up 52 points, closing out at 8194, still slow to leave the magic 8100 number.  Today's movement put the Dow on top of the SunnyBands, ready to begin the push upward.  That's a nice sign of strength that we hope continues for a while.

The next Attractor above current position is at 8255, which might slow down the upward progress just a little.  But, I don't expect it to put a lot of pressure -- or enough to impede the progress.

Figure 3- QQQ 15-minute

The 15-minute QQQ put in a few more steps upward, but had trouble getting much above the Attractor at 26.81, which I mentioned yesterday.

At this point both the daily and the 15-minute RSI is still somewhat week, not pushing up through the 65 boundary yet.  This rally should take RSI through the 65 mark and allow some time for it to reach several days above the mark to show overbought.

If tomorrow continues on upward, which I expect it will, the long-term (daily) models will turn positive, adding the impetus for even more upward movement.  I expect to see several more days of upward action, until the RSI becomes completely overbought at which time we are likely to see a sideways correction over time rather than price.

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