Jury Out on Bull / Bear Battle

Trader Talk

The major stock indexes traded back and forth the unchanged level today, with a mixed close run on higher volume. Officially, the NASDAQ fell 0.7% on 2.2 billion shares, while the Dow Industrials rose 0.1% on NYSE volume of 5.1 billion shares. The leadership profile remains negative, with 100 stocks making new highs versus 218 stocks making new lows.

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

The technical set-up remains the same, with both the S&P500 and Dow Industrials challenging and bouncing off their 50 day moving averages today. The bull/bear battle to dictate the trend for the remainder of the year is held hostage to the current back and forth along those MAs. Commodities continue to collapse, and we reiterate our warning from earlier in the year that these cyclically sensitive groups should be avoided at all cost on the long side. If the bear returns from here all stocks should collapse, including commodity stocks. If the bull continues to run then money should move out of the lagging commodity stocks and into sure growth prospects such as pharmaceutical type of stocks. We do believe the bears will see a big win before the year is out, though we continue to see one more blast-off rally to the 200 day MAs before the end comes for real.

Kevin Wilde, Chief Trading Strategist AlphaKing.com.

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No Tradable Bottom Yet

Trader Talk

The major stock indexes traded back and forth the unchanged level today, with the NASDAQ advancing 1.0% on 2.6 billion shares, while the Dow Industrials rose 0.7% on NYSE volume of 5.2 billion shares. The leadership profile remains very negative, with 55 stocks making new highs versus 801 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 every sell-off running in five waves and every bounce in three, all absent any sign of a capitulation spike down and corresponding up-spike in fear for the VIX, which suggests no meaningful or tradable bottom has been reached yet. Speculation in commodities remains high, with investor sentiment remaining ridiculously bullish, and thus that trend is destined for a hard fall somewhere around here. We do expect a summer rally of sorts for the stock market - once a capitulation low is reached - though an outright crash is not out of the question. What walks and talks like a duck is best called a duck until proven otherwise.

Kevin Wilde, Chief Trading Strategist AlphaKing.com.

For Free charts with trading signals and fundamentals ratings, visit AlphaKing