Over the past two weeks prices have climbed steadily higher to test the 50-day averages most stocks and most indices. The climb came on decreasing volume and as we pointed out several times, it was obviously doomed to fail. Yesterday patient shorts realized some quick gains and overly eager bulls gave back two weeks worth of profit in one day.
Yesterday's high volume distribution day confirmed the market's downtrend, which is projecting a measured move lower. That means that it is likely to make a move similar in length and price to the first leg in this A-B-C correction.
Two things to look for over the next few days:
Options expire on Friday, so bears may be disappointed by stocks that don't follow through lower immediately.
And…
A lot of people are looking for support at the March lows; it seems doubtful that support will be found there, which will cause a panic and a really excellent buying opportunity for the next leg up.
2 comments:
uis is just so cool. i pray for a higher market opening today so that we could enter as high as possible. even above the stop loss line,yeah!!!regard,wez.
like a bouncing cat, the market today has got some buying power but quite limited. if it is used at the beginning, it will close lower (dow under 12050). if it is used later, it will close higher. it depends. regard,wez.
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