Wednesday, July 7, 2010

Good signals - weak market internals

We are still waiting and observe.
What we see market is testing a new support.
Financials made strong and confirmed institutional bull volume insertion.
As financials always in advance of general market. Growth without financials lead most probably to correction.

Also, we can see short-cover effects (low-volume buys with large price effects and daily swings) last days.
Pretty usual symptoms when market tries to find and create bottom.

For this time, almost all bull retails are shaken out of their positions, retail bears in trap.

Wise bulls make ultra-light quantity buy and note this as a bottom. When signals are stronger then more and more buys need to be done. Some swings are expectable, lower than bottom price will be used as our immiediate liquidation level. Let's note: liquidation level is 1010. So, we can only loose our trading comission if we come back.

Some volume investigation:

1day chart:

We have more and more good signals. SBV histogram is close to a signal cross, what means volume-based trend change.
As we can see, bearish volume is eliminating, but still under signal line.
Other analysis from non-public sources: AI institutional filter shows institutional buying patterns from several sources. Daily selling volume signal is declining, buying volume moved out its zero level. Today there is a possible signal of sell-volume local maximum.Sentiment is advancing.
All signals show possible bull rally, not all signals confirmed. Some small correction is expectable will result final and stronger signals. 60min analysis shows selling volume elimination, and bullish short-term confrimation (oscillator cross). Chance for bearish return is low.

Gold seems finishing its correction.

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