walk the line wednesday., page-16

In America:

Dow Industrials -0.16%
Dow Transports -0.05%
SP500 -0.05%
Russell 2000 +0.06%
Nasdaq100 +0.11%

Comment: The market was down solidly early in the day. At around 11.30, The Buy-The-Dip Mob had finished their Starbucks lattes and got on the job to drive the market back to around square for the day. 11.30 a.m. has recently become a common turn time for the American market. That’s now four days down in a row on the Dow – that might be enough for this short term cycle.

NewHighs/NewLows 203/12. NH>NL. The ratio of NH/(NH+NL) is at 94.4% – that remains in the “no sell” zone (above 80%). Until we see a reversal in this ratio, the current pull-back is probably just a pause in this bull rally.

Technical Comment on the Dow 30:

The Dow finished at 12632.8. Below the 10-Day MA and well above the 150-Day Moving Average.
Indicators:
Stochastic: 63.8. Below both its signal line and the 80 line. Sell alert.
RSI.9 is at 58. Below its up trend line. Sell alert.
MACD Histogram. Below Zero. Negative.
MACD. Marginally below Zero. Neutral.
CCI.14: +28.7. Below +100. A break below zero would be negative.

The indicators are now all in sync. The medium term up trend line still remains intact. Today’s action was on increased volume. A flat day on high volume – indicates a battle between bulls and bears. On the day, despite the Dow being negative, the action has to go to the bulls on the good move up from 11.30. But they do look a bit groggy. The bears still need a knock out punch – a push below the medium term up trend line would do it.

The medium term trend is up. The short term trend is down. At this stage, we have to presume that the current action is a pause in the ongoing bull rally, in place since late November. I said yesterday that my preferred scenario was a retest of the 12810 horizontal resistance before a decisive move down. That still looks a possibility.

Redbacka