I think the most bullish thing this market could have done today was drop a hundred or two on light volume to consolidate some of the gains it’s had over the last 5 trading days. When I was going over my trading indicators tonight this one jumped out as I i immediately noticed that the Nasdaq new lows are at the nearest levels it’s been in quite some time. The last few times (May 31 & Aug 11) this indicator has been under 50 the entire market has sold off as you can see in the highlighted boxes on the Nasdaq chart.
Right now I believe this market wants to rise, but it can’t go straight up and no matter what the retail numbers are I think we’re going to head lower next week. This should present a good buying opportunity to enter new longs and add to existing positions. If the retail numbers are better than expected we’ll probably pop Monday morning and then sell off later that day. If they’re poor then I’d expect to see the markets sell off premarket and keep the market under pressure for a day or two. As long as the selling doesn’t turn into anything more than profit taking and shaking out the weaker hands, this rally could continue through the Christmas season.
