Wednesday, January 11, 2012
The 60 minute IWM chart shows that prices gapped higher yesterday. This is technically good, but notice (again) the lack of follow through. Prices gapped and then stopped.
The daily chart shows the remarkable lack of strong bars over the last week and a half. Most bars have very small bodies and small shadows. There is simply no conviction in the market.
In fact, the QQQs gapped higher and then moved lower throughout the session. Notice that prices closed near the low of the day -- not the high. This is not a sign of strength.
And while the SPYs have technically broken out, I've circled the price clusters the index has formed. Instead of making a strong move through resistance on heavy volume, prices moved higher and then moved sideways for about a week (the first circled area). Then prices gapped higher and formed a second price cluster.
And notice that various sectors of the market are suffering from the same weak conditions.