Special Risk Capital Management LLC

Resistance Hit, Time For a Pause (?) February 21, 2014

Once again I’m pressed for time to write, so let’s get right to the point(s).  On Friday (2-21-14) we saw Supply coming into the market (volume increasing on a down bar), but it was not very big.  On the chart below I’ve moved my “next move scenario” lines over 4 days from last week.

Note that the Money Flow histogram (in red) in showing a decline in buying volume.  Now that’s nothing to panic about, but it does seem to support my idea that demand is softening just a bit and a market pause or slight down turn could be at hand.  Of course, nothing is certain and could change on a dime with any news item.  The news out of the Ukraine is of concern, but it looks like the world market are not concerned as of yet.  I continue to watch the Asian and European markets as an indication of how the US will open in the morning.  We are truly interconnected, make no mistake.

The strong sectors remain basically the same.  Gold and the miners have had a decent run, but they sure are volatile; I keep positions rather small.  So, we’ll see how the “folks” in the investment world act next week.  My guess is the markets will be a little soft here.  The big question remains is this a pause before a breakout higher or an Up Thrust with major selling to follow?  Right now, I’m not seeing significant Distribution if this is an Up Thrust, but it is early.

Maybe a good time to sell the weaker issues to raise Cash for an opportunity a little later. (?)  Something to think ’bout over the weekend.  Cheers and Good Trading.    ……………  Tom  ……………….

chart courtesy of MetaStock; used with permission; of course.  🙂