Wednesday, August 26, 2009

Yawn!

Another quiet day, but there were a few breakouts: DLTR and BWLD to name a couple. ISLE fell hard after disappointing on earnings, but remains above its recent low.

The SMH is setting up a nice squeeze, which looks like it will break out to the long side.

I am expecting volatility to increase next week. The last day of August and the first day of September are historically positive, so it would not be surprising to see some strongly bullish action Monday and Tuesday. Selling on Tuesday would be a big cause for concern.

2 comments:

dave said...

"Yawn!
Another quiet day"

So far this week we've had (SPX daily) a doji; a gravestone doji; & a spinning top consecutively. All three feature closes at or near their opening levels.

Also note that betw Aug 3 & 14 we had two consecutive WEEKLY spinning tops for NDX/QQQQ. Quite a difficult thing to do. Wide range Mon-Fri & yet end up Fri's close where we began the week Mon morning - TWO weeks in a row - a battleground betw bull & bears that resulted in stalemates.

A lot of buying power was used (wasted) in those two weekly battlegrounds. And remember a false breakdown followed those two weekly spinning tops before we had the most recent rally.

But here's the interesting thing. In early December 2008, we also had back-to-back weekly spinning tops.

We may need to have a scary shakeout first before the intermediate trend can reassert itself. Given the recent drop in short interest this would also trap some bears which IMO is needed.

Regards,
dave

R. Craig Pritchard said...

Certainly, there are some interesting technical patterns developing, but on an intermediate term level, these have not had an impact.