Another Look Over the Precipice?
by
, 12-15-2010 at 05:59 PM (1779 Views)
It's seemed like it took forever, but the major averages closed in the red across the board today.
Prior to the market open Moody's announced it was reviewing Spain for a negative outlook. Portugal's 3-month bill auction didn't go as well as hoped, and Japan's Tankan survey revealed large manufacturers' confidence was near a two year low. I suppose that set the tone for today's action.
In addition, the yield on the 10-year note rose to almost 3.56% today, in spite of the Fed's Permanent Open Market Operations, while the dollar climbed.
Volume has not been robust of late, which may be due to the holiday environment.
I had mentioned in my account thread today that should the market close lower the Seven Sentinels may issue a repeat sell (it was already in a sell condition). It came close, but didn't quite make it.
On another note though, it appears the Hindenberg Omen has been triggered again. This is not the first time this year and it suggests that this market is much weaker than it appears, but market "forces" would seem to be at play whenever a correction looks imminent, so I take this as another yellow flag, but not necessarily one that will go red.
Here's today's charts:
NAMO and NYMO remain on sells.
NAHL and NYHL are also on sells.
Same with TRIN and TRINQ
Oddly, BPCOMPQ managed to ebb a bit higher today in spite of the red close. It remains the only buy signal.
So the system remains on a sell and looks to be weakening. Normally, I'd be calling for a correction at this point, especially given sentiment, but this is December and I'm not so sure a decline is on tap. It seems that every time the market peers over the precipice another big rally ensues. But I'm following the sell signal and taking my cues from sentiment anyway. A younger investor may want to take more risk, but that does not quite fit my profile. .