Wednesday, September 14, 2011

Technical Picture - Retest of Last Week's High

The retest of last week's highs sold off sharply into the close with continued weakness in index futures as I write this post. Investors are reluctant to hold overnight especially on the third day of a rally.

The QQQ is far outperforming the broader markets as depicted in the chart below. However, unless we start to see some rotation, the broader markets are going to dominate and that is likely to lead us back down to retest support.

Also, keep a close eye on the $USD which has broken to the upside. We are consolidating the move, but once the next leg up gets underway, it will hurt stocks.

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