Lower Lows & Lower Highs

Trader Talk

The major stock indexes took it on the chin once again today, with the NASDAQ falling 2.0% on 2.0 billion shares, while the Dow Industrials dropped 2.1% on NYSE volume of 4.3 billion shares. The leadership profile remains negative, with 71 stocks making new highs versus 240 stocks making new lows.

The short term momentum oscillators remain negative, confirming the bearish stance of the AlphaKing Trading Indicator. We have no new trades at this time.

The overall pattern remains solidly bearish, with the downward stair-step pattern of lower lows and lower highs remaining intact. The economic news remains grim, and can only be expected to deteriorate going forward. The Dow Industrials (chart on left below) came close to touching their 50 day moving average a couple of weeks ago, and such resistance points often provide the death sentance to bear market rallies. While one day popping rally days can be expected to pop up from time to time, we expect the red ink bloodletting to pick up steam as the weeks going forward turn into months of bear misery.

Kevin Wilde, Chief Trading Strategist AlphaKing.com.

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