Market Futures Higher, Technicals Pointing to Rally

By Andrew Nyquist
The markets are readying for a rally.  For the past few days, the markets have opened higher, only to take the wind out of participants sails and close lower.  This is the markets way of grinding you out.  Then, when the market finally rallies, your psychology whispers “sell, sell, sell” in your ear.

Well, futures are higher again today, and we face that similar psychological headwind.  Do we fade the rally because that’s what we’ve seen, or do we hold on to see if this develops into something larger.  Tough call, but technical analysis is pointing to a coming rally.  The lower trendline is offering up support and DeMark analysis (in the US and European indices) indicates that we are either ready to rally, or getting there.  Because of this, I have spent the past week slowly building positions in the market – I am now roughly 60 percent invested.

Below are annotated charts for the S&P 500 (SPX) and the Nasdaq 100 (NDX).  Each are on bar 8 of a TD Demark buy setup.  That said, stay safe, and set sell stops if actively investing.

One final note:  You can search “chartology” and find many annotated charts that do not get featured on the home page.  You can also find these by clicking on my author name.  I will be doing 5 to 10 of these per week on various stocks and indices.

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Position in S&P 500 related index funds (SPY & SSO) at time of publication.

Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of his employer or any other person or entity.