Thursday, August 20, 2009
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For the second time in about a month or so, the market has confounded me. On Monday a a big drop in the Chinese market led me to believe a sell-off was here. Considering the market is pretty overbought right now and the overall position of the technical indicators this made a great deal of sense. In addition, the Treasury market was at important technical levels indicating conservative plays were back in fashion.
Then the market started to rally. And it still is. However, notice that the MACD is still moving lower and has given a sell signal. Also note the RSI is moving lower. Both of those indicate the market is weakening.
Now -- will it make another move lower? Who knows at this point.