To: StockOperator who wrote (12275 ) 4/28/1999 9:55:00 PM From: StockOperator Read Replies (2) | Respond to
The last couple of days trading is a perfect example why CLOSING prices are so invaluable when looking for a breakout of a certain range. The S&P and RUT both managed to break their old levels on an intra-day basis but both also failed to breach those levels on a closing basis. My own twist on the close is that it literally defines and gives meaning to the entire day's trading activity. Noticing that these two indexes were have problems closing above those levels, I thought may have been a clue to the market weakening. Which of course it did toward the end of the day. BTW, you have to love the way the smart money likes to pull the rug out during the last hour of trading. They may have to start changing their strategy in light of the fact that many are becoming enlightened to their tactics. Anyway, the old highs proved too much for these two indexes to overcome. But what does this mean to the overall market and trend. Especially when you consider the transports broke and CLOSED above their (very) short term resistance. We also are in the beginning stages of what could be a major breakout in the utilities. They have already taken out last month highs. So is this the beginning of a short term break or the beginning of something bigger? Unfortunately, I do not have a crystal ball. What I do have is a bunch of charts with data that says tomorrow (at least) we should see significant selling early on. Selling that will most likely punish the tech sector. But I must admit that I have my suspicion in regards to how long this weakness will last. Don't get me wrong the RUT, S&P and NAZ are all pointing down and I do believe we are going to see lower lows tomorrow but once again it will be the close and the last hour of the day that will be important. Let me just say that depending on the damage the next two days, the bullish trends may still be intact. I have many charts that are not indicating a major market collapse at this time. However, now it pays to play things defensively and wait to see how things play out. I hate to say it, but although in my gut I am bullish for some unknown reason, all my charts are saying to start stockpiling food supplies in the fallout shelter
