Low Volume Sell Off

There was wasn't much news to drive the market today and volume fell off sharply as a result. Perhaps the biggest event was the new austerity measures that Italy approved. And their bonds are still attracting buyers, although that didn't prevent the market from dropping.



I suppose it was notable that there wasn't much volume behind the selling pressure, which isn't encouraging if one is bearish.

Here's tonight's charts:



Back to sells for NAMO and NYMO.



NAHL and NYHL also flipped back to sells.



TRIN and TRINQ moved higher, pushing them back to sells too, although they are largely neutral after today.



BPCOMPQ moved just a bit lower in its mostly sideways movement, while the bollinger bands continue to collapse around the signal. It also remains in a sell condition.

So all signals are back to sells, which means I have a third unconfirmed sell signal in as many trading weeks.

I suspect this market is setting up for a larger move, but I can't be sure which way it will be. The Seven Sentinels do remain in a buy condition, but three unconfirmed sell signals in three weeks makes me cautious, although not overly bearish given seasonality. It's possible the market is building up some pressure for a launch through resistance, and it could come from lower. But support has been holding too, so it's now a waiting game to see which one breaks first.

 

[coolhand]

One thing that I forgot to mention in my blog is that while the Seven Sentinels had their third unconfirmed sell signal, confirmation is very near. NYMO ended the day at 2.59. If it drops below -11 or so, that would confirm the sell signal for the intermediate term.

Futures are currently pointing to a moderately lower open, which means the system could get that confirmed sell signal today. But an intra-day confirmation isn't good enough. NYMO would have to close below -11 at the end of the trading day.

We'll see how it plays out, but be alert for at least a short-term fake out even if the signal as achieved.

 

[Mapper]

These unconfirmed sells, when considered with Tom's commentary about the propensity for a fake out are making me hopeful about a fake out lower before moving higher. I'm starting to think we're going to be in a holding pattern until the super-committee news reaches more of a boiling point.

 

[coolhand]

These unconfirmed sells, when considered with Tom's commentary about the propensity for a fake out are making me hopeful about a fake out lower before moving higher. I'm starting to think we're going to be in a holding pattern until the super-committee news reaches more of a boiling point.

That's a reasonable expectation. It's hard to imagine the big money will want to get overly invested prior to a potential market moving event.