***** TA Update (intra-day) *****
The action today confirms that we are not at the beginning of a roaring bull market, as there has been no follow-through after yesterday's impressive sharp rally on heavy volume.
We did get too parabolic to the downside late last week and early this week, thereby washing out the sellers and setting up the Wednesday rally. A technical rally seemed due anyway for the Nasdaq as it had been too oversold for too long and had had only technical bounces.
Now the question is whether the market can experience a rally, albeit probably choppy, over the next 1-2 weeks, on the heels of the strong momentum of yesterday.
The Nasdaq a/d now is 3/5, up/down volume 3/8, on 1.1B shares, which projects to around 1.9-2.0B shares. The u/d needs to be watched carefully as it probably holds the key as to whether we fall off more late in the session or if we can mount a rally. It is natural that we retrace 38% to 50% of the gains of yesterday for stocks but we need to hold above the lows of yesterday.
The NYSE a/d is 13/18, u/d 3/5, on 670M shares, so there is less distribution on this exchange.
We are in the midst of the mid-day countertrend (rally) action and the rally has stalled in the past several minutes.
While a weak close that stays above yesterday's lows would not be catastrophic, technically a neutral or firm close would increase the likelihood of a follow-through rally Friday and into next week. |
