Interesting Day

While the markets appeared to do little today, the day left us with an interesting development. All of the major indexes traded in the narrowest range of the last 7 days while simultaneously registering a 5 period RSI greater than 90. In addition, most of them are pressing against resistance of one kind or another, e.g. 20dema, 1.0SD bollinger band, etc. The Qs, meanwhile, have also closed the last 3 days at a trendline drawn parallel and equidistant from the uptrend channel from the 2002 low to the 2007 high, i.e. the lower fork of an Andrew's pitchfork.

The probability has increased that we will see a near term pullback in this unfolding upward correction. The pattern that has developed would seem to negate an immediate return to the downtrend, so we may still see one more rally afterwards to complete the correction before the downtrend resumes.