I was disappointed on two fronts today, the surprising run the bulls showed early on in the morning, and then the inability of the bears to hold the market at or near its lows of the day. So what do we get? A nice doji candle that represents indecision on the market’s behalf on where the short-term trend has us going. Ultimately the day goes to the bears, the technical setup still remains, and the after the amount of selling that we got out of the market on Friday and last week in general, it isn’t surprising to see the market cool off a little bit.
But the fact that the market could not rally on the positive news out of the ecnomic reports this morning and on the positive earnings from Ford (F), shows the bulls are lacking some major mojo at this juncture.
Below I’ve included the T2108 chart, to show where we are at in terms of being oversold. This is a proprietary indicator that Worden provides, that is probably the best in the business. As you can see, we are below where we were at back at July’s failed Head & Shoulder pattern and a good ways above the March bottom. There is a couple of support levels worth noting, but I believe we could very well test the lows from March once again on this chart.
Its is also incredible how fast this indicator has dropped in the last couple of weeks and goes to show that a major portion of the stocks out there are struggling to keep the trend that they have been riding since March, in place.
