This morning's rally followed through on last week's bullish momentum as the S&P finally pushed through its 200 DMA, but shortly after lunch the bears put up some defense and the indices sold off rapidly, and on high volume. Technology (cautious comments from SNDK) and the momentum groups (AG/Chem, Solar, and Shipping) paced the retreat.Friday's hanging man on the NASDAQ was confirmed with a lower close. The S&P failed to close above 200 DMA and the Transports (DOW Theory) hit a new all time high on an intraday basis today. However, the Transports carved out a shooting star and could see some follow through pressure tomorrow.
The Transports have rallied out of an inverse Head & Shoulders base. After 5 waves, the measured move 100% is almost complete. Notice how volume is waning on the last leg up.
We've had three high volume sell-offs in as many weeks, however, except for the first pullback, there's been no follow through as we continue to make higher highs. We need to see a breach and a close below today's lows in order to anticipate further downside corrective action.
2 comments:
Nice $TRAN chart Jamie.
I especially like the volume comment. I failed to notice that.
I was watching the transports today as well. They hit my more conservative target of 5500.
CNBC did a little blurb about the $TRAN today and mentioned it was a price weighted index, like the Dow, ugh.
Thanks Dave,
Interesting that CNBC rarely focuses on $TRAN until they hit a milestone.
As they say, once the story gets covered by the media, it's pretty much over.
Post a Comment