xjo weekend zoomba lounge, page-54

In America:

Dow Industrials +0.35%
Dow Transports -0.45%
SP500 +0.23%
Russell 2000 -0.15%
Nasdaq100 +0.31%

Comment: A mixed day with the Dow 30 and SP500 up modestly, other indices are down. Volume was elevated because of Options Settlement Day. As I’ve often commented we can ignore volume on such days.

NewHighs/NewLows 163/0. NH>NL. The ratio of NH/(NH+NL) is at 100% – that remains in the “no sell” zone (above 80%). (I only began collecting NH/NL data in April, 2011 – not a long period of time, but still significant. That’s the first time I’ve seen a zero for New Lows. New Lows have also been below 10 since 2 February – that’s, also, the longest string of sub-10 readings for that period.)

Technical Comment on the Dow 30:

The Dow finished at 12949.9. Marginal break above recent high. (Marginal isn’t good enough.)
Indicators:
Stochastic: 84.6. Overbought.
RSI.9 is at 66.3. Positive.
MACD Histogram. Marginally below Zero. Neutral.
MACD. Marginally below Zero. Neutral.
CCI.14: +140.2. Overbought.

I mentioned yesterday that today would probably be a narrow range day – and that’s how it worked out. There was, however, a marginal break above the recent high – marginal isn’t good enough. The chart appears to be back-testing the rising wedge. A failure here would be bearish. A break above the old rising wedge would be bullish.

Today, three significant indices (Transport, Nasdaq100 and Russell2000) were all negative – not confirming the modest strength in the Dow 30 and SP500. One day doesn’t make a trend – but the Dow Transport Index is now in a short term down trend:

This lack of confirmation is a serious negative divergence. Copper is also showing a similar divergence. (More on that in the Weekend Report). Those two often represent the state of broad economic conditions better than the Dow 30, which can stay “irrational” for a long time.

Redbacka