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Thursday, September 2, 2010

Another Dance With Moving Averages

After yesterday's big volume, big gain day, you had to wonder whether the big money boys cut short their vacations, but it didn;t look like it today Volume went back to it's normal low level, and the gains were a bi muted, although we did have another late rally. Economic reports today, despite the touting, really weren't very good, but they weren't bad enough to reverse yesterday's momentum. We are going right back into moving averages again, something we have been contending w0th for months, and so far, there is nor reaosn to believe we won't get some resistance there. We do have NFP tomorrow, which will no doubt be a market mover, and then next week we get the volumn back, and right now there is no way to know which way it is going to go. Og note: RSI has crossed above 50, and MACD has crossed over, so we do have upside momentum.

The Nasdaq is quite obviously laboring, despite the fact that it was this that followed through yesterday. This is also approaching a key test of moving averages, and if it breaks through, this looks an awful lot like a bottoming pattern.

 The Russell 2000, just days ago, looked on the brink of oblivion, but now has completely reversed that and is on the verge of a breakout. his is exactly what the bulls need to see, because rallies that aren't lead by the Russell don't go very far, and have a nasty habit of ending abruptly and sharply.

Crude oil bounced off the lower boundary of the 70-80 range it';s stuck in, but couldn't get throught the pivot point. It pulled back sharply from there, which may give it enough of a push to get through it this time. This, unlike the Nasdaq, does not look like a bottom to me, more like a top. When oil collapses, it's not a supply and demand issue, it's a dollar issue.

The dollar is now testing the pivot point at 82, which jjust about coincides with the 200dma. So far this appear to be a pulback before another move up. The correlation between the market and the dollar is not very strong right now, but that can change.

We have NFP tomorrow, which may or may not be a big market mover. nobody expects much, and volume should be light as some folks take off early for the long weekend. Unlike the professionals who are paid big money to lose yours, I will not be on vacation and will be studiously working, so stay tuned this weekend.

I will have the new highs update shortly.

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