Major markets closed above DTL R as shown on 60m/Daily charts and near at 50ma with over 50% retracement of 7/19 – 8/16 correction.
Trading above the next resistance will further trigger buy/short covering.
QQQQ 50ma 48.14
SPX 50ma 1480 – 1495
DOW 13475
Nasdaq 2600
The speed of recent up-momentum is not surprising based on the extreme negative sentiment and high short level. Furthermore, it took longer time to retrace the 8/8-8/16 correction as we can see, “mirror image” of 8/8-8/16 to 8/16-8/24.
The high short level pressure is fueling markets to upside. As noted earlier, p/c ratio during early morning an yesterday’s was extremely negative, but have reversed as market price climbed higher.
Half Hourly Volume Report for Selected Indices For 8/24/2007
DOW Industrials S&P 100 S&P 500
Time Calls Puts Total Calls Puts Total Calls Puts Total
9:00 AM 81 563 644 832 1221 2053 4841 10289 15130
9:30 AM 217 965 1182 1335 3088 4423 11265 37266 48531
10:00 AM 288 1851 2139 1684 3867 5551 32071 71744 103815
10:30 AM 290 1921 2211 1947 4149 6096 64773 87081 151854
11:00 AM 298 1984 2282 1973 4230 6203 74907 92820 167727
11:30 AM 462 2893 3355 2480 5799 8279 80772 112974 193746
12:00 PM 1037 3032 4069 2969 6757 9726 88219 121513 209732
12:30 PM 1258 3245 4503 3709 7532 11241 103621 131126 234747
1:00 PM 1412 3463 4875 4289 8504 12793 124224 141509 265733
1:30 PM 1494 3607 5101 4652 9524 14176 132504 158076 290580
2:00 PM 4981 13085 18066 5212 11089 16301 138547 173191 311738
2:30 PM 6647 13780 20427 5490 11731 17221 140319 180606 320925
3:00 PM 8341 15156 23497 6643 16135 22778 173540 229640 403180
As shown above DOW p/c ratio, DOW sentiment was extremely negative during morning trading session, however, traders sentiment changed as DOW traded higher.
http://investorshub....age_id=22340344
The high p/c ratio is due to an anticipation of market reversal at the major resistances after the recent rally, LT top speculation, crash speculation, H&S formation on daily, etc.
However, as I commented earlier, markets were signaling reversal after climactic sell-off reversal action with positive divergences on price actions and weekly breadth.
Many stocks are still very oversold as noted before that those were selling into 7/19 top as we can see on weekly breadth actions.
Many market participants are waiting for a pull back so that they can buy when it is safe as well as LT/IT shorters are waiting. However, the highly negative market sentiment shorters in anticipation of crash could push markets higher, as Longs who are looking for safe entries with very little risk wait for markets to pull back.
http://www.stockchar...95305&r=600.png
http://www.stockchar...09398&r=568.png
http://www.stockchar...77535&r=859.png
http://www.stockchar...31079&r=210.png
http://www.stockcharts.com/c-sc/sc?s=$SPX&p=60&yr=0&mn=2&dy=17&i=p98670794592&a=79285156&r=938.png
http://www.stockcharts.com/c-sc/sc?s=$SPX&p=D&yr=0&mn=9&dy=0&i=p22232131775&a=76929034&r=724.png
http://www.stockcharts.com/c-sc/sc?s=$SPX&p=W&yr=4&mn=8&dy=0&i=p49229126946&a=78987374&r=825.png
http://www.stockcharts.com/c-sc/sc?s=$INDU&p=D&yr=0&mn=10&dy=0&i=p31631774778&a=76966992&r=329.png
http://www.stockcharts.com/c-sc/sc?s=$INDU&p=W&yr=4&mn=7&dy=0&i=p06542340040&a=76929550&r=152.png
http://www.stockcharts.com/c-sc/sc?s=$COMPQ&p=D&yr=0&mn=8&dy=0&i=p21609042622&a=76909044&r=764.png
http://www.stockcharts.com/c-sc/sc?s=$COMPQ&p=W&yr=4&mn=6&dy=0&i=p22094758617&a=77295648&r=443.png
