This morning I pondered, tongue planted firmly in cheek, if there was "someone" who was making sure the market would not break 1140. Well, it is starting to look like I might have been right. No sooner did we break 1140 today than a well timed report came out: China is going to buy Italian debt. Yeah, ok, pull the other one. It was a classic buy the rumor scenario, but unfortunately by the time I heard it it was too late. So I will have to wait and see if this leads t something (in the market, anyway, Europe has been "saved" far too many time for me to care about that anymore). Frankly, I think if we do get a rally here it won;t go far, and may just make the next drop that much worse. Any big money still left in the market is going to be bailing out on any ign of strength.
We have a price relative breakout on the Nasdaq, which leads me to beieve we are in for a rally of some duration.When price relative here is rising that is almost invariably bullish.
The price relative on the Dow industrials is dropping, but too slowly for me to get overly bullish. By the way, I included the Demark pivot points on the charts. i haven;t said anything about them, because I haven;t found anything to say about them, other than they give us a very wide range this month.
The Russell 2000 is basically going nowhere, both in price and price relative. This leads me to a more bearish stance, since if this does not lead rallies, usually the rallies are short and the subsequent drops can be pretty nasty. I was leaning bearish before the last minute ramp job today, and considering the reason for it, have not really changed my stance. I am currently 100% cash and will likely stay that way for a while.
I will have the new highs update shortly.
2 comments:
Judging from your post regarding Italy and the general market you seem to have turned bearish since the last "confirmed bull trend" from IBD. From what I see we had 5 distribution days in the past 20 trading days, 8/16, 8/18, 8/25, 9/6 and 9/9. What is your opinion on my distribution day tally and I am wondering if you are seeing the same thing.
Hi YYBC
It looks to me like your distribution day count is right. 9/6 is debatable because it closed well off the lows, but as far as I am concerned I would consider it one. It looks to me like any up move is going to be met with a blizzard of selling by mutual funds, and any move below 1140 is goint to be bought up by the algo traders. I'm not going to try to trade that because i don't want to get caught when the pattern stops.
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