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Tuesday, September 29, 2009

Bounce Back Stalls

It looked like it was going to be another positive day, but apparently the consumer confidence numbers didn't please the market, as we were right at the pivot at 1070 when the numbers came out, and went into a prompt tailspin. However, support at 1060 held, so we spent the day grinding around in the 1060-1070 area. Volume increased, and I believe today's drop was just enough to qualify as a distribution day. I noticed a pattern broken here; since July, after every substantial pullback we have had at least 4 straigh up days. After this last one, we only had one. Is that significant? So far, not really, but unless we get back above 1080, we could be seeing a correction in the making here.

the Nasdaq lagged today, a good indication of a potential down day. This is overall stronger than the SPX, but is weakening. Today should also count as a distribution day here.

The Dow industrials also lagged today, a very unusual occurence. Volume was low, so this avoided a distribution day, but this looks far more likely to break support than any of the others.

The Russell 200o also tested support, and passed. Now lets see if it can get above resistance.

Here is Bernanke's headache. Rising yield on the 10 year should rally the equities market, but will also kill any chance of reviving the housing market. He also needs buyers for the new debt coming on the market, and what is the best way to do that? Cause equities to drop. Of course, it they do, the "green shoots" are going to turn brown fast. The TNX is sitting right above support, and the momentum has shifted down.

The new highs update will be slightly later than usual tonight.

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