Market for this upcoming week 11/17/14

For this week I will say be cautiously optimistic. The market is in overtime right now, not playing in the regular time, playing by the regular rules. Every tick upward right now is hype and borrowed time. Lets take a look at the daily QQQ chart which tells whats going to be happening in the next few days:

As you can see above, the RSI is at the max at the top of its indicator, and the MACD indicator at the bottom below the chart is narrowing showing an impending crossover. Yet looking at the candlestick chart itself, you can see that the QQQ pushes up slowly relentlessly higher a bit day by day. Whats going on here? Unbridled enthusiasm. A few good reports including employment. A very slow controlled mania by the crowd nudging the stock up a bit day by day even though the indicators say its pretty much maxed.
How to play this: Getting in now would be the equivelent of getting in housing in April of 2007. Not yet at the crash, a bit more room to go up, but kinda missed the party and not much more room to go up. Technical analysis is great for really timing a stock. For example, look above on about October 14th. Right there at the bottom you can see two candles, one upside down and another one right next to it right side up, the inverse of each other. This is a technical signal of a bottom and it means buy, the stock will most likely go up from here. At this point I would not sell holdings, but I would be very hawkeye for any top signals that the technical chart here could throw in the next several days.
Another problem now is seeing that the stock is beginning to be overbought, any wierd or bad news in the markets or the world will send this down. So be aware of that.
So what about in the next few weeks? Lets look at the weekly QQQ chart:

There is a thing happening with the cubes (QQQ) when looking at the long view with this chart I am seeing an underlying weakness forming. There is divergence showing. Whenever you see the indicators beginning to lose steam and start slowly heading downwards (The RSI and MACD) the stock will eventually turn and follow suit. Look at the line above the RSI and carefully look at the RSI. It is not quite reaching its high peaks anymore and is uniformly losing steam. Same with the MACD. Uh oh. This is happening slowly, so I would expect another week or two before a big drop.

So once again, for this week, cautious optimism, and for every tick upwards, remember, it is borrowed time so play accordingly.

As for my other pick that I got in Friday, plan on selling the call in the late morning early afternoon, and if the stock annoucement is right, we are going to reverse and purchase a put.

More to come midday on Monday.

Stay Frosty,
Mark