Coolhand's Market Analysis

I'm running late this evening so I'm going to go straight to the charts tonight.



NAMO and NYMO both moved back into a buy condition today. From the beginning of April you can see the peaks on both charts have been dropping lower. The troughs have too for the most part. This certainly suggests a weakening market, but how much downside can we expect?



NAHL and NYHL didn't move much and remain in a sell condition. You can see a downward slope in these charts as well.



TRIN and TRINQ both remain in a buy condition, but are close to neutral now.



This is the chart that's been the biggest tell on market trend and today it moved lower still, which keeps in a sell condition. I put up a 1 year chart in this case to show how a trend reversal doesn't usually a spike off the bottom. Generally there is a few days of sideways movement before a trend reversal takes place. That's not happening yet and in fact this signal just keeps pointing lower. And that's notable.

So the system remains on a sell and I continue to believe we will gradually move lower, but I'm not looking for a target bottom. I'm looking for a change in internals and some stability coming back into the market. I'm not sure how that might happen, but with QE2 winding down the Fed may initiate another dose of liquidity to keep the markets propped up. That's a possibility, but while that strategy has worked so far (depending on one's point of view), it's not without risks at this stage of the game.

But I suspect one way or another we will find a bottom in the days or weeks ahead and make another sustained move to the upside. And when the market is ready to do that, the charts will hopefully be providing some clues ahead of time.