Monday, November 5, 2007

Today's Markets

The markets opened lower and then traded in an inverted saucer pattern until they got to about 149. Then the volume really picked up which is usually an indication of serious program trading activity. The markets couldn't hold the upward momentum and sold-off a few minutes before the close.

The 5-day chart shows consolidation over the last few days with today's late action breaking the downward trendline.

The daily chart shows the price action below the 10, 20 and 50 day SMAs along with some heavy volume over the last few trading sessions. As the VIX chart below and long candles of the last few days show, volatility has been creeping up over the last few sessions.

The QQQQs have more support for their current market position. That's the good news.

The bad news is although the QQQQs are holding to their short-term averages....

The NASDAQ advance/decline line is breaking down

As is the QQQQs new highs/new lows line.

The market internals for the NASDAQ -- which is the market's great hope right now -- are not looking good at all. Fewer and fewer stocks are contributing to the rally.