MARKET COMMENTARY

The Dow had a good run amid high volatility. But the bullish euphoria sank after around 1 pm during the day. At closing, we basically have not seen anything particular useful technical setup for trading and for getting a glimpse at the likely new direction.

Just as yesterday, the Dow continues to swing within the triangle pattern. Without any breakout, there is nothing much we can do except to wait. Nevertheless, one thing I can mention on the Dow chart is that a bearish breakout is more likely now. This is judging from the way the trading went yesterday as well as the declining volumes. All major indexes behaved that way. It shows that the market is getting lethargic or beginning to feel some selling pressure. Friday is probably the day to get the answer.

Divergence in all charts continues to show. How much of all these will have a bearing on the market remains to be seen. Anyway, all we need is to see a new direction.

DJIA Daily Chart

The Russell made new high again. It is very much overbought now. We definitely have to wait for reversal play. Speculate on the downside has a better risk/reward advantage. In the mean time, we just need to be patient.

RUT Daily Chart

The immediate resistance for NDX is 1990. Although the Nasdaq surged on Thursday, the momentum is definitely sinking. Volume has been declining for the sixth straight days now. It is keeping me sitting on the edge of my seat now.

NDX Daily Chart

 
STOCKS TO WATCH:

Watch out for housing and financial stocks to get hit again.

Subscribe to the post comments feeds or Leave a trackback