Trading While Working: 1/12/2014

Trading has been largely sideways on the S&P 500 since the last short side shakeout. Most of the US indices look bullish, at least for the immediate term. But we can't ignore the fact the these markets are hanging close to overbought territory on a regular basis.The channels on the daily charts are all offering higher levels yet again, and the trajectory appears very steep.

The Dow Transportation Average has already made new highs, so I'd like to think it's a hint of what's to come for other indices. The blue channel on the S&P 500 was drawn a day or two ago, and is being held to on a closing basis. Oscillators on the 4 charts below all suggest continued upward motion for another visit to overbought land.

Another thing of note - the jobs data that came out was largely considered 'disappointing', yet the market didn't appear to react as many expected. Some chalk this up to being a case of market participants seeing it as an excuse for our central bank to put off tapering. I think we could be seeing potential examples of the ideas that surround contrary opinion in the markets. There's a lot of fearless optimism these days (low VIX, the consensus bullish sentiment on Barron's is 'overly-optimistic'), so I intend to remain very alert.

Barron's Investor Sentiment Readings

Below are the daily charts for four US indices.

S&P 500 Daily Chart