Coolhand's Market Analysis

Originally Posted by coolhand

Well, It's obvious that the bears have not gone away as yet. The market started out positive, but could not maintain that positive start.




Looking at the charts, we can see that the S&P 500 is now getting close to testing its 50 dma. Price on the DWCPF appears to be weathering the weakness a bit better than the S&P. Neither chart is showing any serious technical damage, but if the S&P 500 doesn't firm up soon, it's possible that it may violate support at its 50 dma. That still won't be cause to get overly bearish, but it would embolden the bears. Momentum is falling, but is not bearish as yet.



Breadth flipped bearish on the NYSE today.

There are bearish forces out there that have trying hard to take this market down since the September peak, but the bulls have not been inclined to simply step aside. It is also not unusual to have a big bullish shift in NAAIM and then see immediate weakness for up to 3 days or so, but that isn't a given every time it occurs. Unfortunately, it's happening in this case to this point. I still expect the bulls to counter this downside attack. If they do not turn the market back up soon however, we may see NAAIM back off their bullish disposition at least to some extent (emphasis "may").

I remain bullish, but if the S&P 500 closes below its 50 dma, I may go neutral. The relative strength of the DWCFP is still encouraging, but it's the S&P 500 that has better visibility among traders.