Monday, November 2, 2009
More Bearish Data
I also wanted to show you the very important daily ascending trendline I've been talking about. After some choppy action around it last week, the S&P held beneath the trendline convincingly today. The slope is so steep on the trendline that the longer it holds, the harder it will be for the bulls to regain. Also, if any rally attempt ensues this week, look for the trendline to cap any rallies on a closing basis. Tomorrow the trendline is at the 1061 S&P area.
Also, meandering through various markets and securities I wanted to note that market barometers Dow Utilities and Transports indices closed negative today (along with the recent market leader Russell 2000) with all of them also breaking below their October 2nd lows, along with the Nasdaqs, following the Russell 2000 which did so last week.
So as I implied earlier, the surface numbers on the markets look like a strong rally and bullish action today, but other than the positive close, I see all the underlying factors very bearish. The 5 wave dollar rally, flat NYSE internals, the VIX failing to call that "BULL SIGNAL", and weak key indices today warn of significant bearish underpinnings in the market right now.