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Charts courtesy of stockcharts.com

Monday, October 28, 2013

The Monday Curse Is Broken


So far, the Monday curse has not appeared today, and I successfully got my charts without a crisis. and now the question is, was it worth wile? Not much changed today, the trends we has seen in place for the past few weeks continue. The SPX hit a new high, so it has not yet found a resistance level, and where I have it now doesn't really look right, so it probably isn't. Volume is again dropping, although that is not a big surprise, and CMF is getting to a very lofty level, so we could be in for another pause, this time maybe a real one. We have established a pattern in the last few months of nose bleed inducing rallies, only to be met with stomach churning drops, and another rally. There is no evidence we will get another big drop here, but then, there was no evidence we would get one on the past 3.


Adding some evidence to the slightly bearish leaning is the now nearly month old lack of leadership from the Nasdaq. CMF here may have peaked, but this was at a new high just a couple of days ago, so, while it is not encouraging for the time being, it really isn't bad, either. If we start seeing price relative dropping, then we have a problem.
The Dow industrials have been n a roller coaster ride for the past 6 months. Unlike the other indexes, it is still a long way from hitting a new high, and price relative is still dropping.  This is a bit unsettling, as the Dow is normally considered a "safer" index than the others, and it looks more like a penny stock.

Like the Nasdaq, the Russell 200 ceased to lead the market early this month, but also like the Nasdaq, the price relative line is not dropping, so it is very possible this will start leading again at any time.

Today really didn't change much: we have a trend now of the SPX leading, the Nasdaq and Russell 2000 now following, and the Dow lagging. Normally that would be mildly bullish, and so far it has proven to be, so  I will have to trade accordingly.

I will have the new highs update shortly.

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