Today the NYSE advancers to decliners ratio was about 6:1, volume was obviously low, especially compared to recent volume. The Dow had 30 winners, as with all of the other averages, the dominant Price/Volume relationship was Close Up/Volume down, in the Dow's case 28 stocks where in that category, this is not VERY bullish, but I'll get to my thoughts on that in a bit. The NASDAQ 100 had 94 stocks in the green, 74 in the dominant P/V relationship. The Russell 2k had 1807 stocks closing green and 139 closing down. Finally the S&P-500 had 473 advancers, a seemingly solid day.
Of the 239 Morningstar Industry and Sub-Industry groups 233 closed green, again a seemingly strong day.
Volume was without a doubt, the dark cloud, volume should advance on rallies. I suspect today's market was manipulated higher by HFT trading and Wall Street for a specific purpose.
Here's an intraday chart of the SPY, the white arrow is a resistance level, the orange is the Inverse H&S bottom neckline, the green arrow is today's trade breaking the resistance of the white arrow and at the red arrow is an odd price series, nearly a straight line with no corrections. This is typical of short covering, but volume and panic just didn't seem right for that, or of short term HFT algo manipulation, which would be perfect in a low volume environment, I suspect it was HFT trading.
A you can see the QQQ had a 15 min negative divergence suggesting a pullback/reversal as I mentioned today many times.
The SPY showed the same on a 5 min chart
The DIA on a 10 min chart, so this appears to be more then an intraday pullback, it appears to be that head fake I was looking for Friday.
You can see the same on the XLF 5 min chart
Now for the longer term view after a shakeout....
The long term view is still very bullish on this DIA 30 min chart, this is why I think any downside will be a head fake/shakeout.
The Dow's Linear Regression is holding support at the long term trend.
So is the S&P-500, also note high red volume spikes more often then not are reversal points.
This is the long term and important 500-day moving average.
Here's a closer look of the S&P-500 holding that average.
Looking at the linear regression pivots, you can see we have retraced about 38% of the decline, so the 3C indication we were getting not only halted the slide, but retraced decent portion of it. However, I think this retracement has more meaning then that, should the market pullback from here on a head fake, it will be a convincing retracement to draw shorts into the head fake.
The VIX also gave an important buy signal by closing outside of the Bollinger bands, closing back inside of them and then making a lower close-this is a buy signal. So I have been looking for that head fake since Friday, today's volume and breadth seems to signal that the market got a little help higher, putting it in to a convincing place for shorts to jump back in, but remember our long term view indicators and how they trump the shorter term pullback indicators. So I do believe after a head fake of what was a very obvious bottom, I think we'll see significantly higher pries. Of course this is all based on the analysis I have in front of me at this time, which is the best we can do, but it makes sense to me. I wouldn't be surprised to see a gap lower tomorrow and the averages head toward breaking below their respective necklines.
OIL
Oil looks exactly the same, a dip down and then a move higher. This chart is a 1 min chart suggesting a move lower tomorrow.
The 30 min hart has been effective and suggests more upside in USO.
Pulling all of this together is UUP, our proxy for the dollar. UUP saw accumulation today and looks as if it will head higher tomorrow. A higher dollar usually means lower equity and oil prices as well as PMs.
The 5 min chart suggests the same.
As does the 10 min chart. So we get a dollar rally tomorrow and an equity and commodity sell-off on a head fake move, then we move higher. That's my take and those are the charts that got me there.
