At the top Before Drop

Discussion in 'Technical Analysis' started by viktor_k67, Oct 26, 2010.

  1. <p>Today was one of the day when the S&amp;P 500 did not reflect the opposite trend of US Dollar - US Dollar Index went up, yet, the S&amp;P 500 index remained flat. There could be two explanation of such behavior: a) the patter is broken and S&amp;P 500 and US Dollar trend will not be correlated, or b) the S&amp;P 500 index will catch it later by stronger movement down.<br /><br />October 21st high is broken it could mean that bulls are taking over. This high was broken on the S&amp;P 500, DJI and Nasdaq 100. However, the break out was very weak and the indexes retraced back down. I would not like to be in a long on such weak trend. There are too many negative signals on the leading indicators for me to be Bullish. It could be premature to play short, yet I would not bet on any bullish signals right now. I would rather stay in cash.<br /><br />Worth checking:<br />&nbsp;- DJU (Dow Jones Utilities) index is already in correction<br />&nbsp;- DJT Bullish volume surge on October 23, 2010 extremely strong;<br />&nbsp;- Starting from October 14, 2010, the US Dollar shows the possibility of recovery;<br />&nbsp;- Yes, the S&amp;P 500, Nasdaq and DJI are trading close to their highs, however, the trading is very weak;<br />&nbsp;- Despite the fact that S&amp;P 500, Nasdaq 100 and DJI are close to the top, advance decline volume and issues ratios for these indexes are trending down.<br />&nbsp;- Huge volume surges in period from October 13 until October 20, 2010 have to be played out somehow on the supply/demand balance...<br><br>P.S. Advance decline and volume indicators for US indexes could be found on <a href=""></a> </p>