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Tuesday, November 10, 2009

Tuesday update

The Bollinger Bands caught my attention real quick this afternoon, they tightened backup, watch for a large move tomorrow, that usually follows after consolidation type of days. Maybe the bears will get a surprise they like!!
After the bell, SPX closed slightly to the positive, and we did not get any follow through from yesterday. We could have a completed corrective wave up, or we could also be in a 4th wave of an impulse wave higher. With the way the small caps are acting(Russell), this rally does not have all the troops present to push up the hill much further, with all the indexes out of sync, it just does not feel like a bullish scenario building here, but rather part of a topping process. Even with the SPX finishing green, the declining issues beat out the advancers, 1.35:1, on the lightest volume so far, for this rally.

The SPX is coming up onto some heavy resistance now. It might be trying to make a double top, just as the Russell did earlier. So far today, there has been no sign of follow through from yesterdays large move. Currently the decliners are leading 1.22:1 over the advancers.

Here is a good chart that is showing the disconnect between the Russell, and the SPX. As people start selling out of the high beta small caps, and looking for safety, the Russell is really starting to show its weakness now. The Russell has also been the leader, as the rest of the indexes try and play catch-up.

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