Let's start with the good news: The good news is the market is oversold while the indices are just off their 52-week highs! That rarely happens the NSYE 10-day Up volume peaked on June 21 and has been working lower since then. It is about time for the buyers to return. Also note that NSYE short interest reported over the weekend continues to increase. Friday's extremely low up volume reading on the NYSE produced the expected minor rebound within the allotted time frame. That is another successful signal, which has now expired. The consolidation like action has been ongoing for over a week and the market has become oversold setting the stage for the next step higher. Near-term we are in for a test of last week's lows. If such a test takes place, watch the internals for a non-confirmation meaning improved internal readings vs. lower prices, which will indicate the sellers have exhausted themselves and the buyers are ready to take over.
Now the not so good news: There have been two "up" days and two "down" days within the past four sessions. However, both of the "up" days have occurred on declining volume, while both "down" days were "distribution days" indicative of institutional selling. The broad market has basically gone nowhere over the past four days, but a look "under the hood" at the volume patterns discreetly reveals underlying weakness. Professional traders who monitor underlying internals and volume patterns may begin hovering their fingers over the sell buttons in case prices begin to confirm the early warning signs. Conversely, a breakout above the highs of the recent ranges would instantly send the major indices back into new multi-year or record highs that are completely devoid of technical resistance. Stay alert and prepared for either scenario at this critical juncture...
Subprime concerns have reared their head again after Countrywide Financial (CFC) badly missed analysts' expectations and slashed its full-year guidance as delinquencies rose across all mortgage product categories. Apple is going to be a big downer, etc. Overall, the market just has a " strange feeling " to me now. ~ stoney
Lol, so your saying, "it could go up, or it could go down" basically.
Sweet, that was my assessment.