Thursday, January 5, 2012

Still Looks Like This Is a Counter Trend Rally

Click on Chart to Enlarge

The 10 day average of advancers-decliners is nearing the overbought range for a counter trend rally.  Again, IF this is a bear market rally, it should be topping soon based off of past tendencies.

Click on Chart to Enlarge

The ADX is showing a non-trending upward move since the October low in the S&P 500 on the weekly chart.  Many times the MACD will reverse at or around the zero line on a correction against the trend.  Look at the MACD in the summer of 2010.  It went slightly below the zero line then reversed.  A similar thing may happen here as the S&P 500 approaches overhead supply/resistance.

Looking at all the technical information, I don't think the market is in good position here to make a sustained rally.  The moment of truth is close at hand though.

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