First day of summer. Big distribution day. Gann said the equinox could be a turning point. But which way? Trend is down so a turn is up? Traditional TA charts say no. I say yes, but am not confident about how high price goes. Maybe price doesn’t even take out the recent high before becoming overbought again. This market is in watch and wait mode if you want to go long. Shorting is tricky because the market is very oversold and positions may be shaken before more downside. My assessment is that this is a short term traders market. Price should bounce next week. But it may not or it may drop real fast early in the week. It is probably a good time for a vacation.
Price is at the traditional Gann Angle of 1×1 which was resistance since July. I expect this angle to serve as support on this attempt to break through. The move from Mar07 to Oct07 went 212 points in 212 days. This makes a traditional Gann Angle of 1 point per day work. My opinion is that this is just a coincidence… but could be wrong. At any rate, the 1 point per day line has worked since Oct07.
The market internals show that while the TRIN/TRINQ are up, the momentum has turned down. But on a positive note, the NAMO and NYMO are higher with price near the lows.
Chart courtesy of Stockcharts.com
I should have paid more attention to my bad breadth readings yesterday. I tried to “explain” them away and that never works out for the best…
Post Modified: July 3rd, 2008 at 12:01 am
Tags: Distribution Day · Market Internals · Market Outlook · Roadmap · Standard and Poor's 500 (S&P500) · VolumeNo Comments
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