Potential Speed-Bumps on the Dow

4 negative aspects about the chart above (click to enlarge):

1. Nearing the top of the current uptrend.
2. Volume fell on Thursday when the Dow made a new yearly high, and then we had a distribution day on Friday.
3. Dow 10k acted as a magnet and now that we overcame that psychological number, we could “sell the news”.
4. This is probably the most significant as the McClellan Oscillator is now negative, and could make a new lower low. The fact that the market is near it’s highs and this is not confirming is a troubling sign. While it’s not reason enough to aggressively short the market, it clearly is a sign to lighten up on one’s exposure to the long side.

Comments

[Joe Shareho...:]

Here are a few more reasons to sell. Broke FDIC with 500 banks still on the list, foreclosures surging, policy makers that are more concerned about imposing ideologies than actual economic improvement, and finally our debt level that is unsustainble. Bearish? Naw......

Oct 19 08:52 AM