Dow Jones Industrials Follows-Through
Posted on March 23, 2008
Filed Under Market Speculator |
On the heels of options expiry, the Dow Jones Industrial Average (DJIA) staged a follow-through day on Day #8 of its attempted rally. Stocks were given a boost, volume wise from quadruple witching. Most of this volume was front loaded, on the NYSE volume was 3x higher than Normal at 10 o’clock. Following 10 o’clock, volume remained on its normal pace down slightly as stocks rose into the close. A follow-through day nonetheless, but this speculator is far from thinking we are in the clear!
There are quite a few things missing from this follow-through day that are troubling. One, Wednesday the NYSE composite index flashed a day of distribution. Two, the DJIA did not close on its highs of the attempted rally but below Tuesday’s action. Three, New Lows and New Highs continue to be skewed to the bearish side. And four, the amount of stocks above their 200dma continue to be lower than those above their 50dma and 20dma. A sign that the long-term trend is in place as far as those numbers are concerned. While we may run to the upside, I believe this Confirmed Market Rally will ultimately fail.
Stocks are still searching for their bottoms, too many are now believing we have. Its not a recipe to build an ultra-long long term portfolio. Cash is still very much the king!
Market Speculator
Comments
Leave a Reply
