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Monday, May 13, 2013

Nothing Monday

It could have been worse, but it could have been a lot better. After a very good buying opportunity in the morning, we did get a late morning rally, but volume was low and it fizzled mid day, basically ending up where it started.  The target at around 1560 is still in reach, but it is starting to look like we may not get there without at least a pullback, if not more. However, there really is no reason to get bearish yet: declining volume is about the only bearish sign on the chart.

 The Nasdaq doesn't really have anything bearish on the chart right now. The price relative line, which had been falling for months, did an abrupt reversal and is headed up at a rapid rate. As long as that continues, this market is going to rally,
The Dow is now firmly under performing the SPX, and that is also bullish. As long as the price relative line is in a down trend, it will continue to be bullish.

The Russell 200, up until a little over a week ago, was about the only bearish indicator left standing, and that is now by the wayside. The target in the IWM is at 100, which even a month ago was preposterous, now it looks inevitable.

Volume dropped off substantially, and price went pretty much nowhere, but all in all, that is probably bullish. Earnings reports are drying up, so that won't be much of a factor for the next two months. Normally we are pretty weak going into this time of year, so even going sideways will be bullish. One thing I can say fairly confidently: we are nowhere near a real correction.

I will have the new highs update shortly.

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