Friday's Russell 3000 Shuffle Causes Mixed Signals

The large volume that came in at the end of the day Friday was due to a reshuffling of the Russell 3000 index. Unfortunately this one time event skewed the results of our scans making it impossible to determine which volume represents continued buying or selling interest and which volume represents only a one-time event. We work heavily with probabilities but we do not guess. To open a new trade off of Friday’s charts would require us to make a guess and that we cannot do. Meanwhile, while the market did follow through from Thursday’s selling confirming the downtrend, we also face end of the month window dressing. Selling pressures are likely to give way to buying later this week as retirement money and window dressing monies move into the market as they do every month at about this time. In other words, the bears may be in control as of Friday, but there is no guarantee they will retain their hold, at least not over the next week to week and a half.