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Monday, November 4, 2013

Correction On Hold

 The market is supposed to be correcting now, so what the heck is going on here?  A nice mive today, but on low volume, indicating that so far this move doesn;t really have legs yet. However, we are already lose to a new high, and nowhere near bearish tterritory, miles above the 50dma.  It's getting so you can;t even get mildly bearish before the market heads off into nosebleed territory. Oh, well, there is always tomorrow.

The Nasdaq is not really helping the bearish case, but also not helping the bullish case. Right now, and for about a month, price relative has been trending sideways, which tells us just about nothing about the internal health of the market. All it takes is for this to break one way or the other to move the market pretty substantially, and from this chart, there is no way of telling when, or even if, that is going to happen.

If the prior two charts weren't confusing enough, let's throw in the Dow industrials, which are doing a lot of zigging and zagging, only to end up going nowhere. Notice price relative has stopped dropping, but is not really rising yet, so this, too, is telling us little.

The price relative on the Russell 2000 broke down last week, about as bearish a signal as you can get, but did get a bounce today. However, so far, it is just a bounce, and needs to be sustained for several days in order to reverse the trend. Right now, the odds are somewhat against it.

The correction that e appeared to be entering last week seems to have been put on hold, but probably only temporarily. However, with the lack of panic in the market, it also does not appear that it will be very severe when it does arrive.

I will have the new highs update shortly.

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