There weere several positives today: we got yet another green bar on the elder impulse system, so our short term uptrend is pretty safe; high volume; and a breakout through 1180, proving that level is vulnerable. We did, however, get a sell off which closed us below 1180, so it's not time to party yet. Still, the market showss no signs of serious distribution, and there is definite buying into the commodities related areas, which just a few weeks ago were the laggards. CMF is still pretty low compared to previous peaks, and today won't help it much. Much as it did to QE 1, the market is responding to QE 2. A rally is a rally, that is, unless you price the SPX in gold.
The Nasdaq 100 is getting close to the April high, and according to my rough calculations, has a target above it. This area clearly caught the brunt of the buying early in the rally, but has slowed significantly of late. Today, however, put a nail in the coffin of a potential trend change.
The Russell 2000 made a very nice move today, and now I am projecting 720 as a target here. This is showing absolutely no signs of trouble.
Ah, but here is the trouble, and this could get big. The financials have gone almost nowhere in this rally, and today had yet another failure at resistance at 15. if this can't get off the carpet, and I don't see how it will as the foreclosure mess unravels in front of us, it is going to be a severe drag on the market.
The market is flashing green all over the place, but the areas of strength and weakness show that the market is responding primarily to the trashing of the dollar, which won't be tolerated much longer with Geithner lecturing the rest of the world about weakening their currencies. The currency war seems to have started, and we are now in a race to the bottom to see who can become the next Zimbabwe first. Swell.
I will have the new highs update shortly.
0 comments:
Post a Comment