Just Wait Until . . . . November 23, 2012
Posted by Tom in Thoughts.Tags: active portfolio management, market analysis, market commentary
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Kids often hear “Just wait until your Father comes home ! (implied: “You’re going to get it !”), and that’s what this shortened week feels like. Basically just 3 days long (Friday was a half day) and many market active groups were on vacation, so it’s hard to draw much if any conclusions. This posting will be a short one but let’s quickly take a look at this market . . .
What I see is possibly a Sell Climax (SC) followed by an Automatic Rally (AR), which is stopped for the time being at a previous support level of 2565 on the NASDAQ Index. Next weeks action will confirm or reject that idea so we must “Just Wait Untill . . .” Maybe we’ll “Get It” or maybe we won’t. Unfortunately the Volume does not help to confirm much of anything. It was light all this week which would indicate a Lack of Demand, but that could just be the Thanksgiving Holiday talking.
Sure we’ve broken above a downward sloping trend line (purple line) but we still need a Sign of Strength and a Failed Low (i.e. a higher low swing) to really confirm this structure. If not . . . it is just a Re-Distribution phase and this market will go lower. I have done some very selective buying and have a fair amount of Cash right now. Patience. 🙂
What sectors are strong in the near term? Out of the 68 sectors the Top Ten are shown below. Note A/D stands for Accumulation/Distribution (A thru E ranked), a money flow indicator and RS stands for Relative Strength (1 to 100 ranked), how strong this sector is relative to the S&P 500 Index (compared).
Have a good week . . . . this could be interesting. ……. Tom ……
(Chart courtesy of MetaStock; table from www.HighGrowthStock.com; used with permission. All graphics can be enlarged by clicking on them for easier viewing.)
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