Friday, March 27, 2009

Friday Outlook

Coming into the open today my little ETF basket are all hugging the upper LR75 channel band. I've stepped back from the typical LR30 perspective as that channel got a good-bye kiss 10 days ago from the entire basket.
While the action over that time frame has produced 45 degree price ascents in the basket, if the market is going to pull back, this is a likely high pivot. Friday's Qs have about a 70% percent of ending down over my recent 16 month backtest period, so there's an extra little bias favoring the downside.
Traders that focused solely on overbought RSI(2) levels have clearly been frustrated as those levels have persisted for 10 days or more in each of the basket and are, in fact, still holding.
The MACD indicator panel is more suggestive of an impending retracement, but is also divergent with recent price action.
On an intraday basis trade activity over the last few days has been rather weird to say the least as extended periods of price consolidation are dramatically catapulted in one direction or another without apparent catalysts. This is one reason the VIX remains in the 40s despite the recent market surge.
Finally, don't overlook Tuesday's Bucket List post.

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