I'm surprised that the market still reacts to consumer confidence numbers. People always say that they don't' translate into actual consumer behavior, yet the market always gets some kind of reaction based on them, even if they're just knee-jerk reactions. That's what happened today. The numbers put a damper on the early strength. Things actually looked pretty bad for about 15 minutes, then calmer heads prevailed. But by then the damage was done and the early highs were not approached again. The result was a little bit of give-back on Monday's gains. I'm sure the bulls will take that, especially given Monday's light volume. However, I really want to keep an eye on today's highs. There's a danger that we just made the first in a series of lower highs. If we can't make any progress on the quarter-end games tomorrow I'll really be skeptical of the rally continuing...
Minor downgrades to the short term trends...
| Trend | Nasdaq | S&P 500 | Russell 2000 |
|---|---|---|---|
| Long-Term | Up | Up | Up |
| Intermediate | Up | Up | Up |
| Short-term | Lat(+) | Lat(-) | Lat(-) |
(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
Lat Indicates a Lateral trend
*** I'm simply using the indices' relations to their 200, 50 and 10-day moving averages to tell me the long, intermediate and short-term trends, respectively.
Mike,
Your observations are spot on. We did not have follow through today and we are now entering a trend of lower highs. Of course we need a lower low to confirm a down trend.
I think there is substantial evidence building to support the thesis of a market top. For the immediate term, we will likely trade in a descending channel. Baring a SIGNIFICANT breakout tomorrow above 1065, I believe there is a chance we will see 1025 by the end of the week.
I posted some analysis on my blog if you are interested.
All the best!
after little pullback(10-20p), nasdaq will resume UT to make new high
You may be right. There is a lot of power on the up side. The market can't get any downward momentum.
And too late in the year for any sizable pullback, unless Friday's unemployment report shocks. January sell-off likely IMO.
Why do you believe it is too late in the year for a sizable pullback?
Mike,
I have noticed an interesting phenomenon in my trading platform and I was wondering if you have an explanation. I use Schwab Streetsmart pro. If I have a chart showing DJI (the Dow) open and another chart with DDM (Dow Double ETF), the DDM chart will react a second or 2 before the DJI chart. For example, the DDM chart will spike up, then shortly after that, the DOW will go up. Wouldn't you expect the DOW chart to move ahead of the DDM given the fact that DDM is reflective of what DJI does. Is it possible that there are traders that see the DJI information before everyone else?
Tom
Off the top of my head, there could be a couple of things causing that:
1. Your system may be polling for the actual Dow quotes less frequently than it does for quotes of actual stocks/ETFs.
2. Maybe there are some programs trading the ETF based off of the movements of the actual stocks (or some other formula) that are moving the ETF ahead of the actual index.
Thanks
There is the follow through on the downside! Support would need to kick-in at around 1025 - which is the interesection of the lower trend line in the channel and the 62% retracement of the last major rally leg we had (from 993-1080).