Gaining Strength

This has to be about the strangest things I have ever seen: 4 straight days of 4+% moves n alternating directions. Volume dropped off again, which is probably good, because we are now in day 4 of a rally attempt, so we are on follow through watch starting tomorrow. This kind of action is usually a decent sign that a short term trend change is coming, and I strongly suspect a tradeable rally is coming, and am positioning myself accordingly, with, of course, stops, in case I am wrong.  By the looks of the indicators, bith stochastics and MACD historgram, I strongly suspect I am not, and 1250 looks like a pretty reasonable target.

One reason i could be wrong is seen on the Nasdq 100 chart, which executed a very nice gap fill today, something that usually reults in a pullback. If we do get one tomorrow, especially on lighter volume, I will consider it an opportunity to take some more positions. Another big down move, and it's back to the drawing board.

The Russell 2000 is also facing some resistance here, and may also be in for a pullback. This lagged most of the day but came on strong going into the close, so it should have at least some momentum going into tomorrow. At least that is what I am counting on.

The percentage of stocks on the Nasdaq above the 50dma is deeply in bear market territory, but is also rising. I'm a little ticked off I can;t get this in a candlestick chart anymore, becuse I sure would like to have seen if yesterday's low was higher than Monday's low (the close was). Today's close was higher than Tuesday's, so for now, this is in an up trend.

It is even more pronounced on the NYSE, which appears to be rising a little faster. A couple of more good up days an this should be back above 30, at which point I will be looking to sell, as i don;t think it will stay there very long.

It does look to me like we will have a rally here, which probably won;t be very strong or last long. What happens after that I have no idea, but I am looking at another drop that retests 1100. That will proably happen in late Auguest to early September, just in time for another Bernanke stick save. That is, if he has any sticks left.

I will have the new highs update shortly.