Yesterday we discussed conflicting data points, which were keeping the market in a range of indecision. Yesterday bulls showed that they are determined here and a few points favor the bullish case here.
First, the QQQQ has drifted above resistance. We cannot call this move a breakout as volume was average and breadth on the overall market was slightly negative. Nevertheless, at points of indecision, price is the most important and price is winning here.
Secondly, the semiconductors followed through on its breakout and made a strong move higher yesterday. If the market is going to rally higher we want to see tech leading the way. And tech can’t lead the way very long if the semiconductors don’t come along for the ride. This was the problem with the rally, which started late last summer. Everything but the semis moved up keeping the rally relatively mild.
Finally, no one trusts the market here. Far more puts were purchased over calls again yesterday. This has been an ongoing situation ever since the market crashed late February. And the result of it has been a market that has been walking up a wall of worry as shorts are forced to cover at higher and higher prices.
Bottom line, the bulls still have some work to do, but they have the wind at their backs here.
1 comment:
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Warm Regards
Biby Cletus :- Blog
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