All major stock market indices are testing the first resistance. In the past I've noticed that Nasdaq Composite is usually the most reliable index to use for accumulation/distribution studies. The Dow Jones on the other hand seems to draw the most reliable trendlines. In the following days I'll be closely monitoring how indices behave in the vicinity of resistance lines.
Nasdaq is already in the buy zone from last Friday accumulation day. This is the first positive sign. The second is that no distribution has been spotted in any index during this rally. The third positive sign is that, after facing resistance, the market seems to try to consolidate before a breakout. On the negative side, all other indices except Nasdaq are still in neutral mode as no major accumulation day has been seen in these. The two leading stocks I bought, TNH and HANS, are not really performing as champions. And the third, the most negative, my top tier long watch list is virtually empty. I really don't see any high quality setups developing in the leading stocks right now. From my perspective, this still looks like a bear market rally. But, we should wait at least a couple more weeks to see if markets can penetrate through resistance and keep the gains. If this shall be the case, another bull market might be on the way. For now, I'm staying about 40% invested in stocks and 20% on gold and have no intention to increase exposure until conditions improve.
Nasdaq is already in the buy zone from last Friday accumulation day. This is the first positive sign. The second is that no distribution has been spotted in any index during this rally. The third positive sign is that, after facing resistance, the market seems to try to consolidate before a breakout. On the negative side, all other indices except Nasdaq are still in neutral mode as no major accumulation day has been seen in these. The two leading stocks I bought, TNH and HANS, are not really performing as champions. And the third, the most negative, my top tier long watch list is virtually empty. I really don't see any high quality setups developing in the leading stocks right now. From my perspective, this still looks like a bear market rally. But, we should wait at least a couple more weeks to see if markets can penetrate through resistance and keep the gains. If this shall be the case, another bull market might be on the way. For now, I'm staying about 40% invested in stocks and 20% on gold and have no intention to increase exposure until conditions improve.
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