Info!! Indicator Update For September 8Th

Last week's review noted continued signs of weakness with the indicators together with questioned the market's upside potential. We did, indeed, come across weakness during the week, with the marketplace moving into moderately oversold territory (top chart) together with expanding the number of stocks registering fresh 65-day lows (middle chart), every bit a number of wide indexes tested their July lows. Still, fifty-fifty with the decline, all was non looking correct for the bears. Sectors that had led the downside, such every bit retail, housing, together with fiscal issues, were no longer behaving inwards a weak manner. We began seeing divergences with many of the indicators, suggesting that the weakness inwards the NYSE Composite, NASDAQ 100, together with S&P 500 Index were non beingness mirrored across the wide attain of marketplace sectors. Indeed, if nosotros expect at 52-week lows with the S&P 500 stocks (bottom chart; credit to Decision Point), nosotros come across a clear drying up--not an expansion of weakness.

With the government's bailout of the GSEs, we're straightaway seeing a sizable rally earlier the marketplace opened upwards on Monday. I volition travel watching the follow-through on this rally carefully to approximate whether nosotros accept seat inwards a pregnant bottom inwards the stock market. If nosotros have, nosotros should sustain a positive NYSE TICK with wide sector participation. This would railroad train the atmospheric condition for a decisive interruption inwards a higher house the resistance at the 1300 share inwards the S&P 500 futures. Failure of a follow-through on the rally would render us to a mode of probing the July lows. The marketplace doesn't actually assist with whether yous concur with the government's actions or not; our project every bit traders is to read render together with demand. So far, nosotros saw waning need every bit nosotros approached 1300 together with and then waning render every bit nosotros broached the July lows. Influenza A virus subtype H5N1 selection upwards inwards need hither would travel potentially significant, triggering substantial short-covering. I'll travel updating indicators each AM earlier marketplace days via Twitter.
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