Wednesday, November 19, 2008

Yesterday was a start - but today needs follow through

Only a late day charge rescued what was on course to be a break of support. Volume sided with the bulls in a strong last hour of trading.

On a closing basis we have picture perfect support with a solid bullish divergence in money flow. Stochastics are only a hair away from turning oversold (although a bit too close to support to suggest a break of support is needed to make them oversold):

The level of angst as measured by the VIX looks to have apexed at the tip of a bearish wedge.

However, don't lose site of the mixed breadth indicators; nothing is firmly bullish. All we have is a good case for support to hold, but nothing to suggest a move past neckline resistance.

Dr. Declan Fallon, Senior Market Technician, the free stock alerts, market alerts and stock charts website