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Thursday, May 13, 2010

Rejected By The 50

The lack of real improvement iin the jobs situation may have given impetus to the selling, but today, was really the first test, and failure, of the 50dma. This is so far proving to be a dead cat bounce, and we could well be headed for another shot at the 200dma. Volume continues to decline, although in today's case that is good. we now now in day 4 oof a rally attempt, the point at which we start looking for an O'Neil "follow through day", a day of substantial gain with increased volume. Not today.

For the rest of the charts I included both the simple and exponential 50 day averages, as it is important to figure out which one is being keyed off. It appears the Nasdaq hit resistance at the simple average, and came back pretty hard. Volume dropped here too, but it is a bit disconcerting that CMF is dropping faster here.

The Dow seems to be ignoring the averages, as neither seems to be providing support or resitance. It dows seem to have som serious resistance at 10920, today's high.

After a bullish setup, oil reversed and had a mini crash. It did manage a move up through the 200dma, but is having trouble making any headway, has a descending 50dma to contend with, and has headwinds from a (relatively) strong dollar and weak demand to contend with.

Last time I looked at the TNX it was in a perfect position for a bounce off the 200dma. It did just the opposite, and still can't get back above it.  Nothing make U.S. debt more attractive than a volatile stock market.

The week began with euphoria over the ECB bailout, and may well end with the realizaion it's not going tp work.

I will have the new highs update shortly.

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