Friday IBD called a questionable follow through day, but so far today they have been right. There is a potential problem here: the 50dma is now proving to be resistance, and if volume keeps dropping the way it did today, we will not likely get through it. Assuming the 50dma gives way, this market has a potential to rally up to about 1375, which, while not a wild bull market, is a decent gain from here.
The Nasdaq had a very good day today in comparison, although it also had a big drop in volume. The price relative line is weak, and could be hitting resistance at the horizontal line, but it has, for the last two days, started moving up. If that continues, we rally some more.
The good news is the Dow industrial had, by comparison, a pretty lousy day, which is bullish, but the bad news is that is is also hitting resistance at the 50dma. It looks like the buying dries up as the price approached the 50, and won't pick up again unless it is broken through (or goes into another big swoon).
The Russell 2000, unfortunately, did not have a terribly good day, although the close was better than most of the rest of the day. This also looks like the 50dma is going to put up a fight, and it has chart resistance right about the same place. If this can't get through, kiss this rally goodbye.
I am not a financial professional, just a guy that trades my own account.
I am also not a musical professional, just a guy that makes music on the computer. Thus, two blogs, one trading and on musical.
And, no, the picture is not me, it is the late, great John Belushi, one of the inspirations for these blogs.
This blog is focused on technical analysis of stocks and markets, putting heavy emphasis on chart analysis. My trading style is derived primarily from my mentor, William "Yoda" O'Neil, and the focus here is on leading and breakout stocks, but all forms of trading are covered to some extent. Economic and political news that effects the market are also topics here, and the blog may occasionally become a platform for my political and philosophical ranting. I keep several spreadsheets on Google docs which track various aspects of the market and readers are welcome to vies and comment on them.
Google Docs Spreadsheets
There are several spreadsheet that I maintain on Google docs to track various watchlists and trends in the market.
1. The earnings list - a group of small and micro cap, low float stocks that have exhibited recent rapid earnings growth. They are modeled along the lines of William O'Neil's CAN SLIM system, but limited to small cap, highly volatile stocks.
2. The relative strength list - a group of stocks which are near 52 week highs and have shown an increase in average daily volume. The list is limited to the top 200 stocks according to my methodology, which will be detailed on one of the pages of the spreadsheet.
It can be accessed here, and is also updates weekly.
3. Relative strength by industry - Uses industry data from Finviz.com to track the percentage of stocks within each industry that are in the top 25% of the 52 week price range, looking for trends.