In my blog last Tuesday, I talked about the relatively high level of NAMO and NYMO's 6 day EMA and how risk was now evident in the market, but that a decline wasn't necessarily imminent given liquidity levels were high. Now that a week has passed it's obvious liquidity can only do so much and caution was indeed warranted at the time.
It's a bit disconcerting that while oil prices spiked 3.3% lower today, it wasn't enough to entice dip buyers back into the market. Oil prices closed
Oil down, stocks... down? - Stocks were down modestly yesterday but for the third day in a row, early gains could not hold. A sharp decline in the price of oil could not keep stocks up as the Dow had to fight in the final hour of trading just to close with a 1-point gain... Market Commentary for 4/12/11 Current Daily Market Commentary
Overall, the S&P, DOW, and Nasdaq were only down modestly, but the Wilshire 4500 took the brunt of the selling today as it fell 0.73%. It still looks like consolidation to me as traders await for earnings season to begin.
News was relatively scarce, but oil prices saw a 2.5% drop to $109.92 per barrel.
Let's go to the charts:
NAMO and NYMO remain in a sell condition, and we can see now that my concern last week about
Flags, H&S, double tops, and oil - Stocks opened higher on Friday, declined for much of the rest of the day before a late rally took the indices well off their lows. The Dow lost 29-points on the day... Market Commentary for 4/11/11 Current Daily Market Commentary
At first glance, the Top 50 look as though they have become much more defensive for the new trading week. We did have a bit of weakness late last week, but I didn't think it was enough to significantly affect the mix at the top. So I went back and took a look at how the Top 50 were spread out and I immediately knew why the chart looked more defensive. Number 51 on the tracker chart is the S fund. Right behind it at numbers 52-64 are folks fully invested in the S fund. We had just enough weakness