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Charts courtesy of stockcharts.com

Monday, March 12, 2012

Signs Of A Top

The market is once again displaying some topping action, as it approaches resistance. Volume, which is preliminary here, was low as the market rallied off a slight decline at the open to finish slightly positive. Once again the buyers are not willing to buy at these elevated levels, and everyone is waiting for Bernanke's next rabbit out of the hat trick, which comes tomorrow.

Price relative on the Nasdaq is basically in a holding pattern here, but still quite high.  This was down on low volume today, so there is not hurry to sell, either. Any selling in the last 3 months has been severely punished, so profit takers may be a bit gun shy here.

 Price realtive on the Dow, which was at a very low level last week, went even lower before getting a bounce today.Notice that ATR has dropped so low that it pushed the bottom line (dates) off the chart. It seems the market is getting a little over confident here.

The Russell 2000 continues to under perform, and if anything is screaming "top" louder than this, I'm not aware of it. About the only thing that can hold this up is Bernanke throwing the kitchen sink at it, and he just might.

The market, which ignored FOMC decisions for most of 2011, is starting to  pay more attention again, although I;m not sure if there is really anything more the FOMC can do. I think the public has realized that "inflation expectations are low" BS that Bernanke keeps repeated are exactly that: BS. All it took was a trip to the gas station or grocery store.

I will have the new highs update shortly.

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