Saturday, February 06, 2010

Weekly Market Commentary: Confirmed 'Sells'

Since the weekly trend breakdowns markets haven't managed to mount a serious challenge of recent highs. Instead, markets have continued down to trigger confirmed 'sell' signals. Where there was a spread in the confirmed weekly 'buy' signals last Spring, this time the markets have universally given confirmed 'sell' triggers.

The S&P confirmed 'buy' was April 3rd and Friday - Feb 5th - was the confirmed 'sell'.

For the Nasdaq the confirmed 'buy' was March 30th and Friday was the confirmed 'sell'

And for Small Caps April 3rd was the confirmed 'buy' and Friday the confirmed 'sell'.

With all three major indices on confirmed 'sell' triggers next it's time to look for exit points on the daily timeframe. With Friday's heavy volume reversals there is a good chance for rallies lasting up to 3 weeks. The peak of the resulting rally will define the downtrend channel for the next phase lasting for (potentially) another 5 months.

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