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Thursday, January 13, 2011
Thursday, After the Close!!!
The Bullish Percent Index is up where a sell-off can come any day now, and right now it is diverging, that is, not making higher highs as the SPX is doing.
Municipal Bonds where down on the day, testing lower trendline support(red), and back-testing the bearish channel line(green). Any break lower is definitely bearish. New 52 weeks lows exploded higher today because of these bonds making lower lows, printing 111 new lows at the close, enough for a Hindenburg Omen on this requirement. The McClellan Oscillator levels and the number of new 52 highs were not with-in the requirements, so there was no signal, but any decent size sell-off at this point most likely would generate a signal.
The squiggle count(black) is holding on, now in its third day without any changes to the labels. We still need to see a new high, or a decent attempt that truncates to finish this count up and put a top in, however, I am not ruling out that this is not "The Top", but a top of some sort. It will be how the market sells off that will be the best gauge to decide how important of a top this is. The stronger the Breadth and Volume numbers on the sell-off, the higher the odds it was an important top.
There are once again divergences building on all time frames with the RSI, and volume has been very weak, a large increase of sell volume could push this over the edge really quickly.
Breadth closed at a very weak 1.19:1, decliners, on some of the lowest volume of the month, only 928M share being traded on the NYSE!!!
The Dollar was hammered over-night and thru the trading day, closing down 1.02% and closing in on trendline support at $79.025. The Trend Finder II also signaled a sell early this morning, but the signal is weak, as it has been for the last six weeks during this period of consolidation. A break-out would most likely result in a stronger signal that would be tradable, until then the Dollar is stuck in a trading range best suited for day-trading. The Trend Finder II was designed for longer-term swing trading where you want to catch the majority of large moves, not trading whip-sawing markets.
Even with the large sell-off in the Dollar, Precious metals took a beating also, with Gold down 0.90% and Silver down 2.71%, both are still above important levels of support, and I will post charts if it looks like support is going to give way with lower lows. BTW, there is an interesting chart I posted this morning on Corn Futures!
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