We've been consolidating for over 2 weeks in an uptrend. Many of the Indices are showing bullish price patterns and none have returned below their breakout levels from the first week of August. I believe the consolidation we are seeing now is nothing more than a pause at previous highs (INDU, RUT, SPX, NDX).
The sell off has been quite small, but I would rather be buying sell offs in a low volume uptrend than trying to short. This types of low volume consolidations are the worse types to be attempting a top catch. They typically rise painfully slow. I expect price to accelerate over the next few trading days with a breakout of the recent highs on the indices.
We did get some selling, enough that we could have already seen the low. We had lows with the VIX:TRIN in this area on previous up trends.
The RUT is looking especially juicy and has been showing higher lows. It has formed an OK looking cup and handle.
Consolidation zones intact.
http://stockcharts.c...ndleglance.html?[MARK]
Maybe I'm early, maybe I'm wrong, but now is a decent chance to go long for a continuation of the trend. Certainly better than shorting...
Edited by orange, 29 August 2012 - 12:58 PM.
