For most of today the major indexes traded within a range, most formed Doji's or Stars (a typical reversal sign). Most of the market had a Price /Volume relationship with Price Up and Volume Down (bearish) just edging out Price Up/Volume Up (Bullish) except in the case of the NASDAQ 100 where an overwhelming majority closed price up and volume down (bearish) by a margin of nearly 2:1 the Russell 3000 also had a majority at Price Up and Volume Down.
Consider in the bullish relationship that the SMH closed up with volume up but also formed a shooting star (reversal signal) so all in all I'd say today was a net negative. The only redeeming quality about today's trading action was the trading range that usually would be considered a continuation pattern, meaning a breakout with more upside. There are more negative divergences than you can count, it's hard to find a positive divergence.
The dollar managed a close up today yet oil and gold still gained some ground. Looking at the average's ETFs, most of the volume today occurred on the sell side. The Transports were one of the few really bright spots, but even the Dow -20 is looking at the right shoulder of a H&S top.
All in all, we are still in an uptrend, but as I said the other day-I wouldn't go chasing this rally. The next pullback may not be just a pullback.
Wednesday, November 11, 2009
Lost in the Trading Range
Posted by Brandt at 6:37 PM
Labels: trading range
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