Wednesday, July 29, 2009

Stalling

A stall in an airplane is very easy to recover from, basically the plane loses it's lift and the nose drops.  To stop it, simply let the plane drop a little and level the plane off letting it regain lift.  Right now the market is simply stalling, the angle of attack is to high and right about now the pilot should be getting a Beeping sound in his plane. 
Look at the last two days the market has just stopped moving.  Today the market was in a really tight range.  This morning I mention to watch 970.  The bulls held this today successfully.  On the daily chart, RSI and CCI have moved to a possible sell signal.
The one thing that today did very nicely is on the hourly, it worked off through chop a very overbought market. Also at the EOD broke its down trendline and closed above its 20EMA, which was acting as resistance throughout the day. 

Do take notice of the increase in negative breadth though.  Here is the MEGA B hourly, there has been a steady climb in decliners and down volume during the move.

 RIFIN- shows even more indecsion and stalling:


There are two days left in the month, becareful of some nice window dressing to close out a nice month. 
There is also signicant economic news out tommorrw and Friday.  So we could be consolidating before a big move up or down.
But right now the market is just slowing down giving no clear signal and taking a position here is almost a gamble.  Short-term we may see another move to 980 to test the resistance again, but we have drifted lower the past two days making a lower low, which is bearish. The MEGA B chart from yesterday still is in play as well.
  I have a test position in SDS and covered the majority of my DUG.