I don’t have much to comment on regarding the mkt. The charts pretty much say it all. Again, as I have been saying for a few weeks, volatility is the order of the day, and I don’t see that changing any time soon. So let’s let the charts do the talking tonight:
Although the VIX sold off big today, it is still in a pattern of higher lows. I don’t give VIX trend lines as much weight as indice or stock lines, but they are worth noting.
Now the INDU si showing me a few things here. First it is still beneath the 200 ma. As usual I think it would need a gap up or strong move through the 200 to break back up to the upside. Second, the v is in a steep decline, again as expected post Memorial Day holiday. Third, this is a type of bear flag formation or an ascending wedge, with the 200 ma as the top. So all in all it looks somewhat bearish to me, barring a close above the 200 ma.
The SPX is very similar to the INDU, but notice that its highs are actually declining, unlike the INDU. Because of this it has formed more of a symmetrical pennant or bear flag beneath the 200 ma. It has given two great levels to watch, 1055 and 1110, each a key to the next big directional move.
The NAS, on the other hand has a completely different picture, mainly due to the 200 ma. It seems to have bounced off the 200 ma here, but I noticed something. If you look back to the last three big up moves, they have each shrunk a little in size. So the NAS bulls seem to be losing a little steam. Now if you look from the current down move, this right now looks to be an up move consolidation that will lead to the third move down in this current move.
The RUT looks very similar to the NAS, with a very nice support level to watch. However a close beneath this level is not the big sell signal, the 200 ma still looms large.
So there you have it from my view. I kept thinking that we would see another leg up before the big sell off, however as of right now the charts look pretty bearish to me. If we see some follow through to the upside tomorrow, then perhaps that will be the start of that up move I have been waiting for. However, if I am to be honest, it does not look hopeful to me right now. Again, posts will be sporadic due to soccer. We have a tournament this weekend so I will be out-of-town until Sunday. I should be able to get some charts up tomorrow. Trade well and prosper. AKOT
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