Coolhand's Market Analysis

Follow through off a big intraday reversal has been a big theme the past two months, and we got more of the same today.



In spite of a negative open, the market didn't take long to begin chopping its way higher. But it was another volatile session, which saw the bulls and bears battle it out throughout the day. But early in the afternoon session the bulls took control and sent the broader averages to a second straight day of significant gains.

So it's all about momentum, and if you have it prices generally follow.

Prior to the open, the ADP Employment Change report revealed that private payrolls rose by 91,000, which was double estimates and sets a high bar for the official nonfarm payrolls report, which comes Friday morning.

Later in the morning, the September ISM Services Index was released and it came in at 53.0, which was slightly better than expected.

Here's today's charts:



NAMO and NYMO edged up a bit more today. Both are near their respective neutral lines and in buy territory. But looking at these charts the peaks still suggest a downward trend.



Yesterday both NAHL and NYHL were deep in sell territory, but I said that if we had some follow through to the upside both signals would probably rebound higher. And that's what happened.
Both are also now back in buy territory.



TRIN and TRINQ remain on buys and both suggest a moderately overbought market. I'm not sure how much juice is left in the bull's tank as we are approaching resistance fast, but a reversal could be near.



BPCOMPQ turned up a bit today, but remains in a sell condition.

So we have six signals on buys with BPCOMPQ the lone sell. NYMO is still well away from a 28 day trading high. But even if this market pushes to that level and the system flips to buy, it would probably be time for another reversal. Assuming we get there at all. Officially, the system remains in an intermediate term sell condition, and that's what matters at the moment.

I don't have a whole lot to add here. We've seen this set-up before, which means we could move a bit higher yet, but unless the market can push through those resistance levels above, the upside would appear limited. I'm on the sidelines (F fund) in any event and making the assumption the downside is not over just yet.