Lisa,
Great observation.
Firstly, I believe that the reason we did not pop yesterday at the end of the day was due to the large divergence between the DOW and NAZ.
When I looked at the data last night, the technicals definitely indicated that the market turned and the bias would be to the downside for today.
Then the strength in the Asian market especially Japan's 924 point runup and other good Asian news, plus the feeling of fair/good earnings (SUNW AND OTHERS) was enough to turn the bias to the upside. As I said in the past, fundamentals/news can over-ride the technicals. Lisa, technically, it should have been down today.
OK, now for today's trading range - with today's strong performance, most of the NAZ's indexes are now in the overbought range, keeping in mind that the NAZ did not drop much yesterday compared to the DOW. As for some DOW indexes - the XAL DRG PNX established new highs today (PNX-intraday high), and their technicals are extremely high.
Yesterday was a substantial down day and we closed today below yesterdays highs; therefore one would assume that the technicals would have dropped. Actually, that is not the case, the technicals are still higher than Wed, so even the DOW/SPX/OEX are now approaching overbought even though they were only in the mid range on Wed.
This now takes us back to my original response to Kevin, when I stated that the small range trading phenomenon depends on where the technicals are. Now they are overbought, and I would technically say that the intraday range now means that we are topping out.
If the market is up heavily on Monday, then the technicals overall will be in the overbought range strongly.
At this time, my techicals are indicating that some indexes may start reversing as early as Tuesday. That does not mean that they wiil actually drop big on Tue, just that the actual top of this cycle could be on Tuesday.
Subjectively, many big-cappers will be announcing on Tuesday, so please keep in mind that if the news is good, such could extend this upswing a bit more.
Have a great weekend - boy, I talk too much.
Donald |
