It has taken me a little longer to get around to doing my market updates. I needed to be fitted for a neck brace due to the whiplash incurred while watching Friday's market action. I was ready to write off our move to the long side and declare it time for us to get on our short pants. But just when I was losing faith, the market did what it has now done for the last four Fridays - it rocketed off the lows of the day, and this time it was a turbo rocket.
The impact of this crazy day was to keep our indecisive market just that - indecisive. Now it does set it up for Monday being a day to break through the resistance on the upside and get us out of this trading range. Our slow or long term momentum chart continued to move upslope nicely. Moderate momentum took a dip, and fast momentum almost reversed its downturn from Thursday - all in all, a mixed bag.
Now there is all sorts of talk about testing the January lows. That may be what is going on right now. Tests of high and lows and resistance, support points are never about absolute numbers, but more about a range and whether the market moves decisively through whichever range you are looking at. Take a look at a chart of the QQQQ or Naz 100. You will see that the 2008 closing low for the Q's was set on Feb. 6th at 42.81. That low was tested on an intra day basis on Feb. 7th and yesterday. Both days the market moved solidly off the low to finish higher. Is that the test you are looking for? Our momentum rating for the Q's is still negative (but improving), so they have some work to do before I would consider buying it.
All in all, due to the stronger long term momentum chart, I still am inclined to believe that this market indecisiveness will be resolved to the long side. Monday should be an interesting day.
Now check out our Top 25 lists to see which way our equities are moving.
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