Thursday, February 18, 2010

Rally Continues On Declining Volume

On February 11 I said that if the rally continued the likely target for the Qs was 44.82+/-. Today the high for the Qs was 44.93. The volume has declined with the rally and today's volume was the lightest volume for an up day since the rally began on February 5. There may be an attempt on 45 tomorrow, but given the poor reaction to Dell's earnings after the bell, that is looking less likely. The rally is probably over.

Even though the rally was not supported by volume, the depth of the rally means that we should see support around 41. The 200dema is now at 41.39. I will be exiting remaining short positions when the 200dema is hit and will be looking to go long at that point. In essence we will be looking for a double bottom for the correction with positive divergences.

One interesting fact is that the rally has lasted 8 trading days while the decline lasted 13 trading days. I think wave C down will be a fib number as well, either 5, 8 or 13 trading days. The most likely being 8.

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