Tuesday, December 13, 2011

More Testing with a Negative Close

We did get more downside testing today with a close under last week's low.  That is a pretty negative outcome, but the 5ma of the TRIN has now moved back to a level associated with bottoms over the last 3 years.  Also, the McClellan oscillator is again oversold.  The % of stocks above the 50ma remains well above 50%, which is also a positive.  We may see some more downside tomorrow, but unless we see a positive close on rising volume soon we will have to conclude that a much deeper correction is in progress.  Even so, as long as the 11/25 low holds, the outcome should be positive.  

I added the Qs on today's decline near the low.  We'll see if the market manages to rally tomorrow.  I also have some orders in for potential breakouts should they occur.  One possibility is SCSS which was mentioned this morning in IBD and has formed a cup and handle base on top of a larger double bottom base that triggered a buy signal on 10/20.  The new buy trigger price on SCSS is 21.24.  Be sure and use a stop.

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