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I'll be watching this 5 min (market hours only) chart of the
TF going forward. So far, today's (Wednesday's) "compression"
tactics (price action within the blue boxes) have held price up, mostly within
the upper one-half of this 3-day channel.
This
definition of levitation is from Wikipedia:
"Levitation (from Latin levitas "lightness")[1] is the
process by which an object is suspended by a physical
force against gravity, in a stable position
without solid physical contact. A number of different techniques have been
developed to levitate matter, including the aerodynamic, magnetic, acoustic, electromagnetic, electrostatic, gas
film, and optical levitation
methods."
When markets gap up on the open, they remind me of
something which is levitating…they seem to be suspended/elevated by
combined forces which have exerted energy through momentum. As you can see on
the Daily charts below of the four Major Indices, after today's
(Monday's) opening gap up, they are all still under the influence of negative
momentum, albeit two days' worth of decelerating negative momentum.
As shown on the
2-day comparison chart below, the Nasdaq 100 leads in terms of
percentage-gained on the two-day bounce, followed by the Russell 2000, the
S&P 500, and then the Dow 30 Index. This suggests that the current
market appetite favours the riskier sectors over their blue-chip counterparts.
Whether buying continues to push and hold momentum above the zero level remains
to be seen. It would appear that the high-beta stocks within the NDX and RUT are
the ones to watch over the near-term. Buying momentum within all four Major
Indices can continue to be monitored by viewing the Momentum indicator, as well
as the percentage-gained on a daily basis. Any weakening of these may be a
signal that this recent bounce may have run its course, particularly as the
Indices approach the underside of their major trendline breaks (which I've
written about in recent posts).
Further to my last weekly market update, this week's update will look
at:
Last week's losses were extended this week on all
six Major Indices, as shown on the Weekly charts and the 1-Week
percentage gained/lost graph below.
Today's (Thursday's) price action gapped down and closed below horizontal
support on the European Top 100 Index, as shown on the Daily chart
below.
The RSI, MACD, and Stochastics indicators are signalling more
weakness ahead…one to watch, in view of the comments I made in my post of November 12th. Downside follow-through on this
index should also produce further weakness (and probable support breaks) on the DAX,
CAC, and PIIGS Indices.
