Technical analysis doesn’t have to be that technical. In its simplest form, you look at where a market closes and then looking back at previous closes. Is the close higher? Lower? Or, the same? On Wednesday, the Ps closed at 1690. If you look back to 07/18/13, you’ll see that they closed at 1689. Essentially, they haven’t gone anywhere but sideways for 3 weeks. This is also just barely above the May peak. So, on a net net basis, this market is relatively unchanged for nearly 3 months.
At first glance, the chart looks like it has gone up straight up all year. However, after the aforementioned exercise you can see that it hasn’t made much progress lately. Therefore, the market, basis the S&P benchmark, has lost momentum.
The Quack looks much better. So far, its recent breakout remains intact. And, so far, it only appears to be pulling back.
Like the Ps, a lot of sectors are losing steam. This is especially true in big cap brick-and-mortar type areas like the banks and retail.
The Transports got turned back at their previous highs. Can you say double top?
Trading is a game of clues. You look at everything and decide what action, if any, should be taken. Right now, at the least, things are obviously getting a little mixed.
The good news is that I’m not seeing a lot of new meaningful setups. The database often speaks. And right now, it’s saying that no new action should be taken. Therefore, continue to do your homework (or feel free to pay me to do it for you/or help you with it) but don’t play the game.
See you at the show! I sure “would” like to see you there. “would” you join me? There’s you clue.
Best of luck with your trading today!
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