Ghost of Igłoi wrote:
Today the markets went nowhere. The Silence of the Bulls.
Igy
Tight range for the second day in a row, at the top of a big move. That is a flag or pennant formation, which is normally a continuation pattern, if you follow such things. The market is waiting for earnings. Right now, I see two things in total opposition:
(1) If you count "the correction" as starting from the bottom of the high level consolidation that ended in mid-August, the recovery rally already exceeds the 0.618 fibonacci retracement test, meaning the correction is over and we go up from here.
(2) The weekly EMAs like 20/40 week that have crossed into bear market configuration are still crossed, meaning we go down from here eventually until proven otherwise.
Anyone who claims to know the resolution of (1) and (2) above at this point is just blowing smoke, and it probably comes down to the market's reaction to Q3 earnings in the next 2 weeks. And John Q Public is still pulling money out of US equity funds.
I am still long (and buying) stocks and still short industrial commodities, and I'm not closing anything until the market decides which way the wind is blowing.
One thing I do follow that apparently nobody else on this thread does is the McClellan Summation Index and Oscillator, which is showing a very large momentum thrust following a very deeply oversold condition, just like the bottoms in 2011, 2012 and 2014:
http://stockcharts.com/h-sc/ui