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Monday, September 13, 2010

Volume Arrives

1121 had a familiar ring to it this morning; ah, yes, it is the 50% retracement level of the entire bear market, and my target back in 2009 (a target I thought it was preposterous to think we would actually get to. So much form my prognostication). Well, it's coming right back into play. It seems, on the SPX, we have a pivot point at about 10 point intervals; we shall see which ones are real and which ones aren't.

We got a pretty good increase in volume today, so it could be that the big boys were waiting for a catalyst to move the market. The Basel whatever it was over the weekend (an international agreement on rule for banking, as I understand it) was supposedly the reason for today's rally, and leadership by the financial stocks bears that out. However, the Nasdaq also took a pretty good lead today, and may just be reversing the relative weakness it has been suffering through the last few months,

The Dow industrials have now reversed their trend of relative strength with a steadily declining price relative. That is bullish.

I'm still puzzled about the transports. On the way up they had relative strength, but during the correction have stayed just about even with the SPX., and really show no signs of either strengthening or weakening.

The Russell 2000 made a big move today, but overall is still weak. Can the market rally without the Russell leading? Yes, for a while. But not long.

It's possible that the volume we have been waiting for fianlly started arriving today. If so, then the prognostication is bullish, as the market once again believes the all powerful Central banks of the world will save us once again. Or they will just paper over th problem like they have been doing, leaving it for the next batch of politicians to deal with.

I will have the new highs update shortly.

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