Be Wary of Strong Up Days in Bear Markets. Monday Evening Liqueurs. 28 September, 2015.
XJO up strongly +1.4%. The market opened weakly but quickly reversed to the positive side. The first hour was up strongly. Usually if we get a weak opening and then a strong first hour the index continues up to new highs by the end of the day. That happened today. The XJO put on about 40 points from 11.00 till the end of the day. Volume was low - but that's to be expected on a Monday.
Here's the chart:
Today was very strong - but that's done nothing to change the chart pattern. It remains in a descending triangle. Odds 2/1 it will break to the downside. But - if we do get the long shot going to the upside, we should see a tradable short term trend develop on the upside.
Indicators are showing positive divergences - so there's a lot going for the backers of the upside.
Here's the daily performances for the Sectors:
Everything was positive with Health the relative weakest, up +0.1%. CSL was up modestly in that Sector +0.38% - well under the general market push higher. This sector has three very large stocks, CSL. COH and RMD. Coh was up marginally +0.13%, but RMD fell heavily -2.03%.
Energy had a very good session, up 2.2%. This sector is, however, the worst performing sector on a medium term basis, so today's good result is nothing to get excited about. Poor performers are often volatile and provide hope with good numbers like today. We need to see a continual stream of good numbers before this stops being classified as the "Dog" of the XJO.
On a medium term basis, Industrials and Utilities remain the strongest sectors. Today Industrials +1.7% and Utilities +2.1%. Both out-performed the broad market. That's where the strength lies in our market.
Trin today was an exceptionally low (bullish) figure of 4.22. AdvancingVolume/DeclineVolume Ratio was 77.7%. Those are very strong numbers. Such strong numbers are not necessarily bullish. Those are highest figures since 22 December - not quite the top of the Santa Rally. We saw one more up day after that before we saw a short term down trend.
Until we have clear evidence of a new rally in place - it's best to remain on the sidelines.
(20min delay)