Friday Dec 23, 2011
Hmm could that be Santa's Sleigh landing with a thud on the lawn? We finally had three straight up days and as I write Friday Morning Europe is up as well, that would seem to qualify as a Santa Rally. Further it s bolstered by an impressive recovery in oil prices.
Price is important but so is volume.
A/D Volume
Advance Decline Volume has been slowly improving since the August bottom. The higher lows speak to the advances outpacing the declines.
On alance the internal indicators are turning up, it is just a matter of time. Will the inverse head and shoulder pattern above break out on a thin volume week between the holidays next week? Beats me, I would not read a lot into it over the next week and the resistance has been fierce alone pink neckline.
NYSE Daily Advance Decline Line
Another advantage of examining the internals of the market is that they are much more clear than attempting to count Elliott Waves. Here I put the Relative Strength behind the NYSE Advance Decline line, got that, okay something you don't see on most investing blogs.
RIS is in green the A/D line is in Red Black. The RSI has been coiling like a spring, the energy should expend cone we get into the new Year. But the recovery I think is more clear when one sees that RSI led and now seems to support the move up. At top the NYSE index fights resistance at 7500. Once through it should generate a crescendo of buy orders driving the market up.
Could the market fall back one more time next week. Yes but that should be the last test.
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