TradeWinds for May 23rd

Friday ended up being one of those days that really confounds me. Its was a down day, going against what I had predicted for the week, so of course I didn't like it. The problem that it gives me is that it did not break the back of the uptrend but rather left it in limbo for another day of trading. All the action was in the first hour and the last hour of the day, while in between it was a tug-o-war between the bulls and the bears. The bears won, but not convincingly.

Our slow or long term momentum is still well within positive TradeWind territory, that's good. But on the bad side, we see it slowly turning down and one major index, DIA, has fallen into the neutral zone. Back on the good side, the Q's held up nicely through out the day ending with only a small loss. Of our 40 sectors and indexes that we track, 25 are still in the positive TradeWind zone, 11 are neutral and 4 are negative. That's good, but on the bad side, the number of neutrals in growing. So all in all its a mixed bag.

We can definitely say that the market is oversold and our fast momentum indicator is reaching to an extreme oversold level, while the moderate momentum indicator is not far behind. Barring some market jarring news, its a safe bet there will be a bounce early in the week. If we are breaking down the uptrend, we should see more big down days by the end of the week. If its a positive week, then then the uptrend can be said to be holding. Hold on to your hats.

Now check out our TradeWinds Top 25 lists and the results of the first 13 weeks of our TradeWinds Black Box.