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Better but, “Wait For It !” November 2, 2018

Posted by Tom in Thoughts.
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Nov. 1, 2108 – The British have a phrase “Wait for It!”, which is “English” for ‘Be Patient’.  And that’s about how I read this market.  Yes, improving but not enough to start phasing back in just yet.  The chart below shows prices breaking above the “short term channel” (purple line) and Money Flow improving.

Market Sentiment remains Bearish as does Volume Flow (above).  Another reason that I’ve observed on Thursday & Friday (both daily up bars) on an hourly chart, is that the intraday volume is rather low.  The only thing I can surmise is that prices are going up because of a lack of sellers and opposed to buyers rushing in.  The NASDAQ Composite Index hit my 7443 resistance level (dashed red line) on Friday.  Just above it is the 7520 level which is via a “Wyckoff Significant Bar” (weekly); that’s the level where buyers previous came into this market.

IF this market is to continue higher I’d like to see a close above 7443, but better yet, a close above 7520.  And to round out confirmation I’d like to see volume increasing on up bars; i.e. buyers coming into the market.  Could it be that the last two days were just a short covering rally?  Yes, it could be.  With all of the damage that was done in October it makes sense that we need some time to consolidate and build some type of a base before a spring back higher.  So, for the time being, I’m skeptical about this two rally.  Hence: “Wait for It!”.

Even with all of that, I did close out my market shorts on Thursday and went to a very heavy Cash position.  My model rules “required” the short close out, so it’s not good to second guess it.  Besides, Cash now give me the ability to go in any direction.  Nuff said.

The table below shows that sectors are doing in relation to the others.  In a nut shell . . . consumer products are the safe havens for the time being.

That’s it for now.  Have a good week and those of you in the US . . . Vote !     …………  Tom  ………….

Price chart by MetaStock; table by http://www.HighGrowthStock.com. Used with permission.

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