Special Risk Capital Management LLC

Market Trying to Keep Its Head Above Water March 2, 2013

This will be a short post as I’ve got a Client Newsletter to write for March and I’m just a little behind in some analysis work.  BTW, the monthly newsletter will be posted under the ‘Newsletter’ tab by the end of the weekend.

Since I post the Best & Worst Sectors and the Price Strength and Money Flow charts in the newsletter I won’t repeat them here.  But let’s take a look at this market.    (as always, click on the graphic to enlarge it)

What I see here is the possible beginnings of a Distribution structure (labeled as a BC buying climax and UT upthrust) but this continues to be possible structure; unconfirmed.  We can make a case of a Trendline being broken and a Failed Rally attempt, but I don’t see a Major Sign of Weakness just yet.  That weakness can take the form of a wide range bar soundly breaking the 3125 support level and high volume would clinch it (a hasty exit by many).  There may be one more move up with another Failed Rally attempt, but so far that has not happened.  “This 5 minutes” the structure must be considered a Re-Accumulation structure or a Consolidation (subject to change).

I would also call attention to the Price Strength and Money Flow pie charts in the Newsletter.  There remains a fair amount of “green” in those charts.  Thus indicating there is not wholesale Distribution in the market currently.  The news out of Europe or Washington could change the market outlook  so we must remain observant.  I’ll let my stops and breaks of support take me into Cash.  Until then I’ll try to ride out this correction action.  Keep in mind that it’s loooong overdue and could set us up for better things to come.

There are only a few stocks that make it though my scans right now and that’s another sign that Caution should be exercised in here.  Have a good week and check back for the monthly newsletter.  Take Care.       ……….  Tom  ……….

chart courtesy of MetaStock, used with permission