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Thursday, October 20, 2011


In the absence of any rumors that I know of, the market did a whole lot of nothing today, on no volume, and is basically stuck in between moving averages, Ordinarily i would call this a bullish pattern (and it still may be), but with little to no leadership in the market it is hard for me to believe tha market will go any higher. We have overbought stochastics and a MACD histogrm that is dropping, so a pullback should be coming quit soon. It is how it behaves during that pullback that will tell us more than anything else the trend of the market. At this point the market can go either way, and I'm not onfident enough to know which way to position myself.

The Nasdaq 100 is also playing the moving average game, but is will above the 200dema that it is no longer a factor. It did take a good hit today on high volume, so I don't expect any leadership here in the near future.

Nor do I expect any leadership from the Russell 2000. It did come back nicely after lagging severely in the morning, but not enough to really impress me. It is finding support at the 50dema, but hasn;t even come close to testing the 200dema, and has resistance to get through just to do that.

Even the percentage of stocks on the Nasdaq above the 5dma is undecided here, It is sitting right on 50, the level which differentiates bullish from bearish conditions, and is for the short term headed down. I expect a pullback here as well, and how bad it is will tell us a lot about the strength of the market.

The ame indicator on the NYSE, which is in almost exactly the same shape. Either the NYSE is strengthening, or the Nasdaq is weakening (it is proably the latter), as this was by far the weaker during the depths of the correction. The bear market we have been through was either too short, which means it is probably not really over, or it was not a real bear market. Only time will give us the answer to that one.

We have bullish signals all over the place, except in the one place where we need it. Not only are the market leaders not playing along, but the leading industries are not, either. Maybe this time is different, but I doubt it.

I will have the new highs update shortly.

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