Wednesday, December 15, 2010

State of the Stock Market - 12/14/10 - "Intraday Selling Remains The Trend This Week"

It was Groundhog Day today on Wall Street, as for the third time this week, stocks started the day somewhat strong but ended up giving most of their gains back by the end of trading.   Yesterday's selling took place in mainly the final hour, but today's selling started soon after the open and ran through the rest of the session.  The selling we've seen has by no means been heavy, but you never like to see the market close near its lows for the session, and that's what we've seen this week.   Volume appears to be heavier, giving the Nasdaq its second distribution day this week and the S&P its first.

Technically, I'll share some charts below that will give you an idea of what's happening right now.  Overall, just visually, this looks like a healthy consolidation and with the markets near their 9 day moving averages, it is probably a chance to enter some longs if you have not done so previously (although there are other things going on that bear watching).  

The dollar looked awful on Monday but has bounced back the past two sessions.  Gold and silver has acted how you would expect them to with the dollar bouncing, but oil has seemed to hang in rather well and the chart looks bullish.

All Charts from Telechart, Courtesy of Worden Brothers, Inc.

Of the charts I mentioned in yesterday's post, I don't see many that all of a sudden look better.   I do think those breakdowns were meaningful in some respect and although the overall market still looks OK, for some reason I think caution is a good idea here.   There has been some subtle distribution this week and although this dip may well be one to buy, I don't know how aggressive I would be at this moment.   The intraday action of the past three days suggests the bulls may be a little tired and perhaps you wait until they show strength through an entire session before getting long.   Good luck Thuesday. 

1 comment:

Anonymous said...

its mini-me from hong kong

i found dow has:
-top divs on 5min chart since last thursday~friday
-top divs on 15min chart on this monday
-top divs now on hourly chart yesterday

theoretically, a final shorts squeeze and then a medium correction to be followed. i also noticed that the november high once rejected it (resistance) is not became a short-term support.