The bears failed to follow through with what they began early Monday morning, allowing the bulls to regroup and maintain control. Once again, the market quickly discounted the negative news out of Europe, allowing the bulls to not only support the market, but to unceremoniously, launch it higher. Market rebounds needs a certain amount of strength showing up in the A-D numbers at the beginning of an uptrend, or else prices roll over and head back down to the level of the prior low, or even lower. The NYSE answered the call today, with close to a 90% day, on 9-1 positive breadth, and 26 new highs to go with the NASDAQ’s 24 new highs, on very good volume. And, in the process, may have answered the question on everybody’s mind the past few trading sessions. Are the bulls getting stronger, or were the bears just laying in weeds, waiting for the right opportunity to deliver maximum pain? While the question may have been answered resoundingly today, I must admit, the price action still casts a sliver of doubt in my mind.
The market now needs to accept above Friday's VAh @ 1215.25, and quickly make new highs, or the double-top reversal scenario will hang over the market going into opex. Nevertheless, from the attached chart, it is evident that the ES was still firmly ensconced in it’s recent upward trend channel. One of the best indicators of a change in the short term direction of the market in the recent choppy trading environment, has been the holding or breaking of an extant trend channel, as we witnessed this morning. Sometimes, it's best to keep things simple.
No comments:
Post a Comment