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Monday, September 9, 2013

Clearing The First Hurdle


Gain wise, we have a follow through, and since I retrieved this chart a little early, the volume will likely be revised upward, so we may have the volume as well, although that may be a moot point as IBD may already have called one last week (I haven't seen one in about a week and a half). I treated the first follow through as if it were one, and it looks like I made the right call. The market has cleared the first major hurdle, the 50dma, and is now going to be fighting it's way through resistance to try to get back to the previous high, and i is starting to look like it might have a decent chance of pulling it off. If anything, the market has to be given the benefit of the doubt just for not selling off this month, something it could have easily done, and historically, what it usually does in September. So, for now, we are still in bullish mode, and I am looking to be adding long positions here just in case this is for real.

Well, the Nasdaq is certainly for real, with a breakout today to a new high, price relative is at a new high, and CMF, which barely went negative, appears to be about to go positive. The volume pattern here is very favorable to the bulls. The new target is now 3833.


The Dow industrials are hitting a new low in price relative, something I would normally call bullish, and in this case it may be, but the price relative line was ddropping during the correction, too, and price just absolutely collapsed. The divergence between this and the Nasdaq may not be significant, but it does have me concerned. Anytime the marke acts out of the ordinary, I figure something must be up.

The Russell 2000 mad a big move off the 50dma, about as bullish a move as you can get. Price relative is not quite at a new high, but is very close, and this is vastly outperforming on the way up. I does underperform on the way down, but not by that much, and this looks much more like the Nasdaq than the Dow. Judging by this, the prognosis is bullish.

The market pretty much confirmed a rally today, even if we did not get the volume (and we may have: you will see that on the new highs update), and i looks like we have a good chance of at least testing the previous high. While I have been hypothesizing for months now that the market is near a long term top, it doesn't appear to be there yet.

I will have tthe new highs update shortly.

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