ES -- DX/CL -- isee -- cboe put/call -- specialist/public short ratio -- trinq -- trin -- aaii bull ratio -- abx -- cmbx -- cdx -- vxo p&f -- SPX volatility curve -- VIX:VXO skew -- commodity screen -- cot -- conference board

Wednesday, April 23, 2008

 

looking like a bull trap


bullish price action -- certainly. underlying characteristics? not so good. the following charts are of the nasdaq 100.

deteriorating momentum of a kind seen at many short-term tops. maybe the longer-period momentum is signalling a potential extension of the run, but then maybe not.

hi/lo data are not more encouraging. again the 65d measures are more optimistic -- but the 20d are not.

mcclellan is diverging down as well, as are issues over 10dma, net advancers, net volume... just not encouraging.

these same patterns are evident elsewhere too. they're blatant enough in the financials that i initiated a position in SKF yesterday. but i would also note that they are not as plain in the s&p.

again, there may be an extension of the rally -- all these trends can extend a bit further in time before a reversal becomes likely, and there's always the possibility that further strong gains nominally reverse the trends themselves. i wouldn't be surprised to see divergences build in the 65d highs and longer-term demand-supply line before any cutback.

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