The market is moving modestly up in a slow drip drip upwards. Volume is modest and definitely not blockbuster volume based on mid day volumes on the New York Stock Exchange.
My short term stance yesterday neutral because while we tested the 6/11/2009 swing on the SP500 with equal volume, we ended up closing below the swing high of that day.
So far today at least we are trading above the 6/11/2009 high but only BARELY above it and there is plenty of time left in the trading day. So nothing conclusive at this point. If we close above the 6/11/2009 swing high today and volume is adequate then I am going to change short term outlook to bullish. However, if we close under yesterdays high and close under the 6/11/2009 high today AND volume is considerably lighter then I am going to have to change short term outlook to bearish. So look for a follow up by end of day today.
The interesting thing about the current rally in the broad market is that seasonally we are in somewhat of a tricky time frame. August, September and October are not seasonally the best months in the world for a mega rally. But I suppose we must also consider the context with which this rally is occurring. It is occurring after a price destruction considered to be maybe one of the worst in over 100 years in terms of speed and depth of decline.
So who is to say we can’t get this rally going in full gear now? It is plausible. And based on everything I am looking at now quite probable.
The US dollar index continues to look absolutely horrible and it looks like it wants to break a CRITICAL long term support area.
If that happens, then we could see plenty of added fuel to a broad market rally that is already gaining steam.