Tuesday, February 12, 2008

Volume up, price down

The Qs just couldn't hold above 44.60 today and again ratcheted down the signal line with lower highs and lower lows throughout the day. The NDX (and COMPX) are both underperforming the DOW substantially (see upper chart) and the selling acceleration into the last hour will likely carry over tomorrow. This was a wide range day R2 to S1 suggesting a failure of sentiment. I was surprised at the weakness in the Qs relative to the DOW, but you just have to take what the market gives you . . .even if it doesn't make much logical sense. Now that the RSI and MACD have turned down on the daily chart, I expect the Qs decline cycle to continue to test key support at 43.60. Also see Saturday's post and the 3 LRs studies. If we fall through 43.60 with vigor tomorrow, then I think a retest of 42 is the next stop.

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