I'm a little late tonight and will be relatively brief, not that there is a whole lot to say. Wth all the bullish and bearish talk going on, the chart says volumes, and right now it is saying "dead cat bounce". We have hit a wall at the 50% retracement of the recent drop. However, we have also had an increase in CMF, and price usually (but not always) peaks after CMF. We are on follow through day watch, but judging by the action of leading stocks, we are still in rally mode, as there was very little weakness among them today.
Here is where a substantial number of the leaders are, but overall the Nasdaq really isn't leading. Price relative rises on the way up, but drops on the way down, meaning the Nasdaq is making bigger moves, but is not leasding. Volume was relatively higher here, and if we do get another follow through day it will probably be here.
The Dow industrials bounced perfectly off the 50dma, was rejected perfectly at the 20dma today, and it seems the programs may be keying their trading off this index for now. Volume was pretty high, but the close was near the high of the day.
If there is a reason to be bullish, it is here. Despite the longer term weakness this has been showing, since late August this has been the leading index, as evidenced by the steadily rising price relative line. It has also decisively broken through the 20dema and is getting ready to retest the high from earlier this month.
First Iceland, then Greece, now Ireland, all bailed out. Remember when Ron Paul was complaining to Bernanke about moral hazard? Well, now we have moral hazard on steroids. Who is next, Portugal? Spain? Illinois? Oh, and if you lost you're job and are about to lose you're house, we can't help you out. That would be a moral hazard.
I will have the new highs update shortly.
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