If there was a drop in this market, say from a few well known companies that do move the indexes or a CPI or PPI showing inflation where would the markets find support? 11850, 11800, 11700, 11500? What would be considered a pullback where buyers would want to step in and buy?
if one looks at daily charts of USO or GLD for the last yr ( crude and gold ETF ) stocks one can see how trends can remain in place far longer than one might think they should
Here's a study with "Fisherized" rsi and a classic, but fast (7-period) rsi. There is already a negative divergence of the rsi related to the current high with respect to the rsi from the prior high (5/10/2006). It could resolve itself two ways: (1) bust thru the prior resistance line (2) reverse The inflection window for either would be 10/17 - 10/20. The Fisherized rsi is useful for hot trends, where it will stay pinned (OB or OS). It is a "do not fade til you see the whites of their eyes" type of thing. Even a "dip" below 98 could be just that, a dip. At any rate, you'd be looking at lower time frame charts for more hints, but this thread was for the Daily. best, amg <a href="http://versaluna.com/2006/rsi_study_amg49.png" target="_blank"><img src="http://versaluna.com/2006/rsi_study_amg49.png" width="60%"></a>
truly amazing chart.....i guess if busts through the prior resistance line the bulls will continue to run with it for quite sometime.
Following up on prior post. The early action pushed the INDU hard into a mid-day reveral. During that flush, "classic" RSI pushed thru the first (Oct 17th) trendline, into the next one down, and almost tagged the "Bump" line. The midday reversal cancelled all that and the close was on the second (Oct 20th) trendline. Notice that the fisherized RSI didn't make a perceptible budge. So...still in strength, reaction down is still postively divergent (ie, pullback not full blown reversal). best, amg <a href="http://versaluna.com/2006/1017_induD_amg66.png"><img src="http://versaluna.com/2006/1017_induD_amg66.png" width="50%" target="_blank"></i></a>