It doesn’t feel like a breakout, but that doesn’t matter.
Very little downside momentum has taken place over the last couple of weeks. What doesn’t sell, rallies.
Thursday’s moderately higher volume adds a dash of umph to this little victory won for the Bulls.
We’ve never swayed from our Buyer’s Edge bias despite anticipating a long awaited pullback/correction.
Down On High Volume And Set To Drop A Notch:
It’s a good bet amateur options traders went long volatility when the VIX hit a low a couple weeks ago. As the market would have it, we really haven’t gone anywhere since then. We’ve taken a good step back to watch how these tight price ranges on the major indexes will be resolved.
Beware the head fake.
AWAY – forming a base.
WOR – new high, recent breakout.
OHI – new high, recent breakout.
N – A+, new high machine.
AL – cocked and loaded.
TRIP – cocked and loaded.
FLT – parabolic (watch 100 price level, resistance.)
SODA – forming a base.
SNTS – parabolic (watch 20 price level, resistance.)
MX – cocked and loaded.
VRX – new high, recent breakout.
ARUN – forming a base.
Here’s the latest batch of top rated stocks breaking out of technical bases.
ASGN, PBH, RYL, DHI
The bear appears to prevail with three clear days of distribution over the past week.
But that doesn’t mean the bottom will fall out just yet. Market tops are often a process that plays out over many sessions, sometimes weeks.
We must respect “what is” as price action looks poised to set new highs. Never argue with the market and keep your powder dry.
Our pullback is here. Enjoy.
Traders are likely yapping about a new multi-year low for the VIX. I haven’t bothered to look at a historical chart to see just how long it’s been, but it doesn’t matter. The VIX is indicating traders are likely overly confident in the recent rally and were due for fear, or volatility to return. The VIX uses the OEX options market to gauge such emotions. It’s mostly telling us what we seem to already understand.
Lack of upward momentum for recent top stock breakouts OCN and EVER are telling us it’s not a good time to buy.
Clearly the SPX is feeling the same way as it moves in inches into new high territory.
We’re putting on shorts.
New highs for the major index came despite previous sessions of heavy selling. While heavy selling can often spell the end of a run up, it’s often a challenge to call exactly where a turning point may be.
Trading the market is no different than driving on a twisting road for the first time. We never know which way the next bend will go, we can only adjust when needed.