Coolhand's Market Analysis

The major averages were unable to follow through on yesterday's strong advance for a good part of the trading session as Oracle sent shock waves through the market following its first quarterly miss in 10 years.



As a result of the Oracle miss the entire tech sector set a pessimistic tone from the opening bell. The lows of the day came around 1230 EST and from there the market chopped its way higher to end the day mixed with the DOW advancing 0.03%, the S&P 500 0.19%, and the tech heavy Nasdaq down 0.99%.

Market data was light, but one report was released. November existing home sales improved to an annualized rate of 4.42 million units, but missed the target of 5.03 million anticipated by economists. It was also reported that home sales from 2007 through 2010 were revised downward by 14%.

Here's today's charts:



NAMO and NYMO advanced again today and remain in buy conditions.



Same for NAHL and NYHL.



TRIN worked off its overbought condition and remains on a buy, while TRINQ flipped to a sell.



BPCOMPQ dipped just a bit, but retained its buy status.

So the signals are mixed, but look modestly bullish to my eye. Officially, the Seven Sentinels remain in a sell condition.

Yesterday I had said we'd have to see how the market would react as a result of the very overbought reading on TRIN and TRINQ. Typically, I'd expect immediate selling pressure and that's what we got. I also said that given we are in the strongest time of year for the market that any selling pressure would be limited.

It was.

Moving forward I expect to see some measure of a market advance. NYMO moved closer to a 28 day trading high and since it didn't make it today that bar got lower. Instead of moving above 39 on its chart, it only has to advance through 25 and that's not far off at this point. If it can do that in the next couple of days the system will flip to a buy condition. But this market hasn't been "trending" so buy and sell signals are not particularly effective at this time, which is why you see me trading around these signals for most of the year.

I remain 100% fund for now, but I'm looking to lighten up soon. I'm willing to give the market a bit more time after Tuesday's big advance, but I take nothing for granted.