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Monday, September 19, 2011

Another Failure At Resistance

 As is fairly typical for a Monday after option expiration, we took a pretty good dive at the open, but reversed it and nearly got back to even. What was odd was the action of the leading stocks (leadership and relative strength lists). I noticed most wer up on the day, and there were several breakouts as the day progressed. Some sectorss of the market never really got into gear (especially financials and energy), but there were several pokets of strength. It appears that if we are in for more upside, the leadership will narrow. Today I have included the fiboancci pivot points, and it usre looks like they are being traded off of, as the S1 is nearly exactly at this month's low, and the middle pivot is sort of resistance.

 The exception is on the Nasdaq, where the middle pivot is now support. This has been the strongest market since the bottom in August, and continued that strength big time today.

The Dow industrials now have support and resistance at the S1 and middle pivots respectively, almost to the penny. We may be getting an indication of where the HFT and algo traders are getting their cues.

I sure would like to see the Russell 2000 show some strength, but it just isn't happening. This got rejected at thedescending 50dma, a classic bearish setup. It also has a price relative line that is threatening to break down. If this starts to collapse, I don't know if the Nasdaq is strong enough to hold the rest of the market up.

So far the market, despite a nice run last week, looks like another bearish setup, as we are failing after getting close to the descending 50dma. Whether that is a "set the bears up" move or not is too early too tell, but with an FOMC meeting coming up this week, I have a feeling today and tomorrow's actions are not going to be terribly relevant to the future direction of this market.

I will have the new highs update shortly.

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