Surprising Weakness
Well, actually it wasn't entirely surprising, since we suspected that there might be a bit of a sell off today. It was, however, of greater size than we'd have liked or hoped. That said, the S&P is still on a Buy and the sentiment is supportive of some higher prices, IF we can get something going with some breadth and some support from the Semi's and the Nasdaq. Without that, however, we'll want to be careful.
DOW: The Dow is on channel support. It can bounce but I'm worried that it'll break down.
S&P500: The S&P looks better than the Dow, but it has to take out today's highs shortly. Break it down and it's very Bearish. For now, the S&P is on a daily Buy.
NDX: I just don't like seeing the Nasdaq take out the lows. The good news is that are a ton of puts being bought and paid up for.
QQQQ: The Q's have essentially gone nowhere for a year. I fear that the unfinished business gets finished.
RUT: The Russell does have a "head-and-shouldery" look to it.
XAU: The miners are iffy in here. My feeling? A break above the top of this wedge and we run up to fill the gap, and then take out the highs.
CMS: CMS Energy put in a doji which makes me nervous.
TSY: Trustreet Properties was weak today, but it's still in the channel. I don't want to see today's lows taken out.
RESP: Repironics tried to get us in again, but didn't. Take out today's highs and it's bullish.
KR: Kroger still looks like it could be in for some profit taking.
ELOS: Syneron Medical broke down, and par for the course, did so without us.
CPWM: Just when we were cursing the 30 minute rule, we see this one where it earned it's keep. We're not in Cost Plus yet, thankfully. Then again, it could well come on if we got a market.
FCX: Let's let Freeport-McMoran build a better pattern.
AL: Alcan was strong and that means we don't need to be short yet. If it breaks, however, well then we'll be glad to take it.
ERTS: Electronic Arts is showing relative strength and a dandy pattern. Buy the break out.
CLX: Clorox is a yo-yo, but it's not a huge risk, as far as we can tell.
OCN: Ocwen stayed in the wedge. Interesting. Let's see if it breaks up. If not, well, pass.
Summary:
I'm not smitten with this market, but it's not all bad, either. There's plenty of shorting going on and that's good news and many trends are holding. One thing that's bothering me is that folks are underestimating the strength in the economy--payrolls are growing by much more than the government statistics are reporting--it's showing up in the tax data, though. Why does that bother me? Well I've been assuming that the economy would slow enough soon for the Fed to quit raising rates. If it's stronger than we think, then the Fed (which watches tax revenues closely) may continue raising rates for longer than many assume. That can push the market lower than expected. For now, however, let's use care but try to be constructive even as we play both sides.
Additional Bonus ETF charts:
Be Well, and Trade Smarter Than the Average Bear!
-The ChartSmarts Team
