nothing big to report today but a quick summary: early pop after the open was sold into very impulsively but the bears where unable to follow-thru to the downside. pretty much a V-bottom put in on the intraday charts but interesting to note that as bullish as that turn-around seemed, the ONLY key index to actually get back to or above the morning highs was the AAPL top-heavy QQQ/NDX. the S&P500, NYSE comp, Wilshire 5k, Russel 2k, Mid-caps, etc…. and even the Nasdaq composite and equal-weighted nasdaq 100 all failed to take out the highs put in after the open.
of course, most indexes did manage to close at slight gains so my read into this is that we should keep on eye on market breadth as the momentum on this rally continues to slow on decreasing breadth (fewer names doing more and more of the heavy lifting). a few days does not make a trend but here’s a simple, yet pretty effect trend change tool i’ve used for years… downtrend line breaks and sell the uptrend line breaks on $NAAD cumulative chart (nasdaq adv/declining issues). this first chart is a current 6 month showing the line that i am watching for a confirmed break while the 2nd chart is a longer term one that i made about 5 weeks ago just to show the history on some additional signals.
the current active trades were mixed today with some longs and shorts doing well, others not doing so well. i still really like the IYR/SRS trade as well as the GLD/GDX shorts as both near-term pullback trades and potentially much larger swing trades but there are many other good looking set-ups and active trades posted recently. however, trading a very over-extended market like this while it has yet to give much, if any, confirmed sell signals can be very frustrating to say the least. i’ll update some charts later tonight including the VIX and VXN, which are both looking pretty interesting here.
