Ever had a hang-over without drinking? That’s how I feel this morning. I pushed things a little too hard yesterday and now I’m paying for it today. I have to learn to take baby steps before running (after my illness). Sorry for the late start. Plus I’m having trouble accessing the Dow Industrials chart. So – it’s back to the stand-by, the SP500.
Comment: Well it looked ugly. Notice that October, so far, hasn’t had two days down in a row. Now it’s time for the bears to go for the jugular. That’s marked by the lower up trend arrow and horizontal resistance. Until then, the trend is up, if looking shaky with last night’s big bearish engulfing candle.
NewHighs/NewLows 39/8. NH>NL. The New Lows figure remains benign, while the NH figure has fallen below the bullish benchmark of 50.
$gold:$CRB Ratio pushed back strongly last night into bear territory. So did the Banks. The previous day’s break into bullish territory may just be a false break. In both cases, the charts still haven’t broken the respective trends – similar to the SP500, so bulls still have some breathing space.
Technical Comment on the SP500: The DJIA finished at 1229.5. That’s just above horizontal support at 1220. Dow Industrials finished at 11706.6. Marginally above the critical support area of 12650-12700 Above the 8-Day MA. Positive. Above the 34-Day MA. Positive. Falling away from the 150-Day MA. Negative Indicators: * Stochastic: 91.7. Overbought. * The 8-Day MA is above the 34-Day MA. Positive. * The 13-Day MA is below the 150-Day MA. Long-term negative. * RSI.9 is at 57.9. Falling away from the overbought level of 70 but still above 50. Neutral. * MACD Histogram marginally below Zero. Neutral. * MACD (zero lag) above zero. Positive. * CCI.14: +102.2. Overbought. Negative divergence from price.
Yesterday, I suggested that the American market was due for a pull-back. It played out today. Once again, the extent and duration of the pull-back will be important for assessing bull/bear dominance. The negative divergence on the CCI is not encouraging. It’s usually a reliable sign.
BD - hang in there. I think it took me about 15 Years before I didn't have any emotions about the market - and could trade it like I see it.
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