A light volume move to the upside today helped us work off some of Monday’s morning gap range. This price action is very predictable during normal market environments so I am pretty surprised to see it in play here. Pending normalcy continues, we should see the market turn back down in the next few sessions.
Several bloggers and research reports I receive are now starting to point to the potential inverse head & shoulders pattern forming. Following up on my March 30th recap, we are seeing this formation developing on both the NASDAQ and S&P 500. The only issue with this pattern at this stage is that it is traditionally seen after a severe correction and is identified with bottoms. It is not normally seen as a continuation pattern in an uptrending market. Furthermore, the more obvious looking it is, the higher the chance it will fail. With that said, I would bet this pattern will not play out, but I have no problem in being proven wrong.
Also below I have updates on Gold and Silver. Gold bulls are excited over the fact that Gold broke 1500 intraday. Furthermore, Silver is continuing its parabolic move into the stratosphere. The best way to play both these metals is simply by trading the Single and Double ETFs: Gold = GLD, GDX (Gold Miners), UGL (2x); Silver = SLV, AGQ (2x).
Hope this market is treating you well and stay frosty out there!
| Trend | Nasdaq | S&P 500 | Russell 2000 |
|---|---|---|---|
| Long-Term | Up | Up | Up |
| Intermediate | Down | Down | Up |
| Short-term | Down | Down | Down |
(+) Indicates an upward reclassification today
(-) Indicates a downward reclassification today
Lat Indicates a Lateral trend
*** I’m simply using the indices’ relations to their 200, 50 and 10-day moving averages to tell me the long, intermediate and short-term trends, respectively.
