I had anticipated that Monday's trading would bring more selling pressure based on momentum turning down and BPCOMPQ drifting lower, and we did indeed gap lower at the open, but it didn't last long as the bulls and bears traded blows throughout the day with the broader market alternating between selling and buying pressure. But it was the last half hour of trade that would decide the day's outcome and the bulls won that battle handily as they turned the market back up from near its lows of the day to a moderate gain by the closing bell.
The eurozone continues to dominate the financial news and the latest buzz is that some of France's primary financial institutions might be served with a debt downgrade, which casts doubt over the financial health of France itself.
And this afternoon there was speculation that a sovereign wealth fund from China was talking with Italy about bond purchases.
The dollar tagged a six-month high against a basket of competing currencies in overnight trade, but ended the regular session flat, while treasuries saw a relatively flat trading session go negative as stocks rallied in the closing half hour.
Here's today's charts:
NAMO and NYMO turned up just a bit, but remain on sells. They also remain modestly negative and suggest we could see more selling pressure in the days ahead unless this market puts in a short term bottom very soon.
NAHL and NYHL turned even lower and suggest to me that internals are not particularly healthy, although they aren't falling apart either. Both remain in sell conditions.
TRIN and TRINQ both flipped to buys as they spiked to moderately low levels. They are also not quite low enough for me to confidently predict selling pressure in the very short term.
BPCOMPQ turned down some more today and that continues to make me very cautious. It remains in a sell condition.
So the signals are mixed, but the system remains in a buy condition. We also had an unconfirmed sell signal issued this past Friday, which I said should not be ignored in a bear market.
I can see this market following through to the upside tomorrow, but I am hardly convinced another impressive up-leg has begun, although it's possible in this volatility.
And we did bounce off support today, but in a bear market that could easily be used as a bull trap given we're back at the bottom of the trading range and have bounced multiple times now. But I can certainly understand why many technical analysts might think we're headed higher here. A nimble trader might take that chance, but I'm anything but nimble, therefore I'll continue to watch from the sidelines in the F fund.
