We have now spent the better part of a week trying to get above 1296, only to get thrown back, but not very far before we try again. The market is ready for a move here, whether it is up or down, and if ATR is any indication, it should be pretty big. We have no clear disection here, as MACD and stochastics are bot trending slightly up and weakening. We will have to look elsewhere for clues.
The Nasdaq 100 is telling us that the growth leaders that we all know and love are not going to get us out of this. Overall, it is the cream of the crap that is getting the bid right now, with the momentum darlings like AAPL not doing much.
The Russell 2000, on the other hand, is doing quite well and actually broke out today, and appears to be picking up some steam. This rally, which has been longer and weaker than I expected, may be even longer, and might just be gaining some strength.
The percentage of stocks on the Nasdaq above the 50dma is sure telling us it is picking up strength. I don;t think we will see a major drop in the market until this dips below 50, and i don't expect that until it goes above 70 first. We are probably about a week away from that scenario.
The NYSE, on the other hand, is above 75, whcih means it could reverse any time, although I suspect this is about a week away from a reversal as well. The rally may pick up strength, but I expect at least a minor pullback is coming, but as I said, it could be a week away.
We are running into resistance here, and I expect that we will be going into it, probably starting tomorrow. About the most bullish thing we can do is pull back slightly as we hit it, building up momentum to get through it. The bearish scenario is a headlong assault followed by a failure and spectacular drop. We should have more clarity in another week.
I will have the new highs update shortly.
