These projections are the result of screening for technically significant retracement and momentum patterns that have been further screened for value and bullish sector performance. In other words, the projections are for long positions.
$INDU
$SPX
$COMPQ
Monthly Momentum Positive
(OB) Neutral/Neg. Negative
Weekly Momentum Negative
Positive
Positive
Daily Momentum Negative
Negative
Negative
Note: The trading ranges of late have been so narrow as to make
this indicator very sensitive to minor changes on a monthly basis. The bias
however is still fairly reliable, so it should be taken into consideration. (OS)
means oversold and (OB) means overbought.
To cut to the chase, trading volume pretty much went nowhere on
Monday, and the markets ended mixed. Metals (particularly aluminum), energy and
commodities-based stocks continued to run, and the only source of strong
reversals on our screens were transportation (TNP) software (TTWO, CTXS) retail
(GPI, UNFI), media (DIS), healthcare (ACL), chemicals (WLK), and tools and OEM
equipment (TTC, CMI).
We will find out about gasoline inventories sometime today, which
may add more fuel to the energy fear factor as crude oil runs at (or perhaps
above) 70 dollars a barrel again. The equity markets are truly locked in
neutral, or perhaps have burned out their transmissions in the attempt to move
up. Momentum in the short run, according to our momentum models, is a headwind,
and the long-term momentum measures are weakening. We will just have to see how
earnings pan out and see if the Federal Reserve will get off the market's (and
the economy's) back. Historical seasonality is no friend of the markets now
either, but as we saw last year, even seasonality is not guaranteed.
Here is what the nets saw today:
WLK 2.47/1 65.6%
CMI 2.26/1 66.7%
TTC 1.62/1 52.6%
That's it for now. It is still time to be patient as we look for
new leadership. The markets seem ready to pause (if not correct), so the wait
may be longer than we like. Yet trading is all about patience and
discipline.
FOR FULL DISCLOSURE: MrSwing Trading Team took a position in BOW
yesterday.
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