We had the same king of morning action as yesterday, but the afternoon was completely different as the markets continued going up after lunch. And looking at this chart of the S&P, just look at the size of those candlesticks the last 3 weeks, all within a fairly wide channel.
And if you follow advance/decline volumes, the NYSE had a positive +40:1 advancing volume. I guess that’s dwarfed by the recent -124:1 declining volume, but that just reflects these long candles in both directions.
The S&P is coming up on its 20 day MA and then the 200dma, which also happens to be the top of the channel, so that’s a lot of resistance to break through and may take several attempts. In the mean time we can just trade the channel up and down.
A funny I saw on StockTwits today:
BREAKING NEWS!!! BP stops the leak! they put a giant wedding ring around it and all of a sudden it just stopped putting out ! ! !
Sometimes, entranced by the screens, watching equities, options and futures change colors, charts moving in a wave, and indicators pointing in every direction, I just have to scream....
Broad market internals have been falling off of a cliff since stocks topped in late April, and our computer models have just started forming a long-term sell signal. Either a break well below 1,050 on the S&P 500 or a failure to take out the April high near 1,217 would confirm the sell signal. The next 3 to 5 weeks are going to be very important with respect to the long-term trend…