Wednesday Market Momentum Breadth Volume
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I don't have much today so I'm just showing some miscellaneous charts. The industrials and transports are trapped below the moving averages. Not the 200-day, but the 400-day average. They look like they could break either way.
This is from IBD, "The first up day from a bottom in the major indexes is Day 1 of an attempted rally. If the previous low is undercut, the count returns to zero. If the low isn't undercut, the count for Day 2, Day 3, etc. continues. If on Day 4 or later, the market closes up sharply on higher volume than the previous session, then the market has registered a follow-through day. About 70% to 80% of follow-through days work. That is, they confirm a new market uptrend. When things look gloomiest, don't get discouraged. That's often when a follow-through day occurs."
New lows have ticked up to a level on the NASDAQ that is close to working against higher prices. On the NYSE, they are at a favorable level and are working in support of stock prices.
Here are some comments via Barchart from a few weeks back, "The markets now move into the first full week of February after a tumultuous January that saw more US and European banking system loss announcements, downgrades of bond rating companies, increased talk about a US recession after further deterioration in the US housing market and economic data, and a near-meltdown in the global stock markets starting on the US Martin Luther King Day holiday that forced the Fed into an extraordinary 125 bp rate cut. The key questions going forward include whether additional bad news emerges for the US and European banking sector and whether the global stock markets have sufficiently discounted the likelihood for fading earnings in 2008 tied to weaker global economic growth." [Barchart Morning Call, Feb-4-2008]
