Yesterday looked very strong around lunch time: huge gap up with follow through. This market action on top of retail sales good news made me start buying just in case I missed the bottom.
Usually, on big trend days there is a pause during lunch and then a continuation but only after a shake out. The shake out happened after 2pm around the 1196 level and I went long. However, the market failed to make new highs although it tried. I interpret this as a major indication of weakness.
After the close I noticed two other signs of weakness:
- yesterday was not a 90% volume up day (it was just 88%);
- the consumer discretionary sector etf (XLY) underperformed the more defensive consumer staples etf (XLP):
Each of these weaknesses taken separately don't mean much but when taken together suggest this rally will fail.
I will wait for the market to become oversold again before another attempt at going long.
No comments:
Post a Comment