Thursday, March 24, 2011

S&P 500 Rallying to the Midpoint of its Range But on Weak Volume

Thursday, March 24, 2011  The S&P 500 (SPY @ 130.90) has rallied for 6 trading days off its recent low around 125 after breaking through its 20-day trailing low at around 129 2 weeks ago.  
Although the rally has been impressive in terms of % and points up on a per day basis, volume has been weak, with none of the up days approaching the volume of the 2 most powerful down days.  
Nevertheless, SPY has rallied to above its midpoint, and has closed above the 50-day moving average for the first time since it triggered its sell signal.  
This bears watching.  Remember the key is not to predict but to respond.  Buy stop would be at 133.11 but this rally looks tired.  I could be wrong; I have been before and will be again!


GLD @ 139.22 had a key reversal day - making a higher high then closing lower on a wide-ranging day.  Volume was not impressive but it's been higher on down days than up days, although not dramatically so:  


The Euro looks strong, rising today on strong up volume:


The Japanese rally (EWJ @ 10.59) is stalling - it seems to be forming a flag in the middle of its wide range from peak to trough, but has not been able to close the dramatic down gaps, a bearish sign.  

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