Where do we go from here? Well, the indices closed just above their 9 day moving averages - this is one thing I've been waiting for. I consider that to be bullish, but they just barely closed above them and volume today was really, really low compared to last week's session. I definitely don't like that. They really couldn't get over their trendlines as well, so I can't say we "broke out" today for those reasons. On the bullish side, the VIX did breakdown significantly and perhaps that is a sign of more gains to come. All in all, as much as I would like to say today gave me some clarity as to where we are headed in the short-term, I can't say that it does. I want to see some follow-through tomorrow with higher volume. If I was still invested here, I would let my positions ride on the long side but with a fairly tight stop. Since I am not invested however, I think I can wait a bit longer to see what happens. If volume was heavier today, I would probably be more excited. Unfortunately, it wasn't.
Dow, S&P 500
Nasdaq, VIX
All Charts from Telechart2007, Courtesy of Worden Brothers, Inc.If I see anything interesting when I do my full scans, I'll share later. A quick look at the shorts I listed last night tells me that those setups still look decent. I am seeing quite a few bear flag setups in the commodities - rallying on lower volume. Based on what I am seeing right now, I don't think I would buy a breakout here - I would probably look for more of a reversal lower - but that is just a guess. We'll have to see what tomorrow has in store. Good luck.
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