This market is a snoozefest for a sidelined bear. Internals continue to be lethargic, but price continues higher anyway. Today's NYSE volume was a whopping 829 million on a flat day. Very few traders have any interest in the markets right now. And I'm one of them. I still feel that when volume returns, we need to watch the price action and follow the herd, whichever way it's going. Until then, I'm avoiding this thinly traded market right now.
Above is the S&P SPDR (SPY) illustrating the weakening momentum with volume increasing on the decline and decreasing on the market's rally. Also note that the RSI has a bearish divergence in place and suggests at least a short term pullback is just ahead.
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Lastly, the major indices are diverging at the moment creating yet another bearish setup and opportunity for the bears to smack this market down, if they want to. So far the bears have failed to muster up any strength, and when they have, they have failed to sustain it. But above you'll see that the Dow has made a new high yet the Nasdaq Composite and the S&P has not. As long as this divergence remains in place, the market is very vulnerable to sell off. I personally would wait for some signs of a top, like an impulsive decline or midday reversal. But for the gamblers out there, shorting the S&P or Composite with stops just above their highs would be a gamblin move perhaps worth taking. But it's just that at this point......a gamble.
I've been having computer problems lately and have been working long days on a big project so I probably won't be back unless something significant happens in the market the rest of the week. But I'll be back to normal posting next week.
PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.