Coolhand's Market Analysis

The caution is flag is out again, as today's weakness is putting pressure on the Seven Sentinels.

It was a relatively slow news day, so I'm going to go straight to the charts:



Today's weakness has taken NAMO below the neutral line, while NYMO remains above it, but not by much. Both remain in a sell condition.



NAHL and NYHL are also flashing sells. The 6 day EMA here suggests further weakness may be coming.



TRIN and TRINQ are in buy conditions.



BPCOMPQ dropped below the upper bollinger band in convincing fashion. This flips the indicator to a sell, which raises the caution flag as this is a longer term trend indicator.

So 5 of 7 signals are now flashing sells, but the system still remains on a buy. If it wasn't for liquidity, I'd be more bearish here, but that doesn't mean I don't think we'll go lower. I think we will. You've been hearing me mention that gap on the S&P 500 as a potential target should selling pressure get some momentum. That scenario may be in progress, but it's really too early to be sure we'll go that low. The selling pressure we saw today was uneven, as the S&P 500 only dropped a modest 0.34%. It was smaller issues that got hit the hardest, which isn't surprising. And the major averages did close well off their lows of the day, but volume on the NYSE was higher than it's been in over a month too (it wasn't impressive, just higher). Another clue?

So for the moment I'm continuing to watch the action for a possible entry point as I'm completely invested in the G fund, but I'm in no hurry to pull the trigger just yet.