Comment: Further consolidation in the the Industrials and SP500. Volume on the SP500 has been very high for the past five days. Last night’s session was the highest since mid-March. (See chart below.) Trading in Apple (+1.39%) which accelerated in the last hour of trading pushed the Nasdaq100 up. (Apple chart below.)
NewHighs/NewLows 260/14. NH>NL. The ratio of NH/(NH+NL) is at 94.9%. In the Do Not Sell Zone. These are bullish numbers.
Technical Comment on the Dow30:
The Dow finished at 13333.35. Support/resistance: 13055/13340 MACD Histogram. Above zero. Positive. MACD. Marginally above zero. Positive. RSI.9 is at 65.2. In a zone where pull backs can occur. Stochastic. 86.7. Overbought. CCI.14: +131.4. Overbought
The chart remains within the confines of a medium term up trend channel. The short term trend is up.
Not much has changed since yesterday. The Dow 30 continues to consolidate at the top of its trend. Although indicators are stretching into overbought zones, they can stay there for prolonged periods in a bull market.
Two days in a row, the Dow 30 has breached the intra-day high set in early May and fallen back. There's a tussle going on.
Over the past five days, the SP500 has seen very high volumes with last night the highest in six months. The latest candle is a short dumpy candle – on high volume. A lot of effort with not much result. This still looks like “smart money” selling to me. We need a big down day to confirm.
Bell Wether Stock: Apple Inc.
Despite the last-hour, positive response to the launch of iPhone5, Apple remains within the consolidation shown on the chart above. The long lower tail on the latest candle indicates the buying pressure that occurred late in the day. But technically this still needs to prove itself by breaking out of the consolidation range.
Waiting on the FOMC. Given the heavy volumes and narrow ranges in recent days on the SP500, I have to think that a lot of smart money is betting against The Bernank announcing a strong form of QE3. With volumes like those on narrow range days, a lot of people will be reversing their bets when The Bernank speaks tomorrow. It seems certain to surge strongly one way or the other.
Don't expect much in Australia today. Not only was the Dow 30 flat, Industrial Metals (+0.16%), US$ Gold (+(0.01%), AUD/USD (0.13%) - all flat. Talk about a kangaroo caught in the headlights.
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