September 6, 2011
Uncategorized
By Geoff Bysshe
I hope Tuesday will be more helpful in revealing the market's short term direction than Friday. While the main trend is down, the last few weeks have created a wide range consolidation pattern which will likely result in a large move in either direction.
Friday wasn't all that helpful because with a report of the worst job data we've seen since Sept. 2010 it's natural to expect a gap a lower, and essentially that's all we got. No volume. No real attempt to rally. No real follow through to the downside.
Friday was the last "summer" trading day and the day before a long weekend so it is not surprising that the markets lacked volume and follow through. We'll look out for it on Tuesday, especially on the downside.
However, there is a bullish case to be made here that should not be ignored. If you look at the SPY's you'll see its 10-day MA is now positively sloped, over the 20-day, and the market held there Friday. This plus the fact that it has not taken out the daily trend line from the recent lows should be watched for support.