small fall on Monday?

although today was positive and I continued to add to my long positions, I did see a few cracks appearing in my afternoon analysis.  They are nothing serious at this point, but it wouldn’t surprise me if we have a down day.  I still remain bullish at this point though.

Let’s start with the good news.  Some good facts … over 50% of the sp1500 closed above their 50 day moving average and almost 35% closed above their 200dma.  Although these numbers are still very pathetic in an uptrend, it is the highest level since the bottom and therefore confirms what we already know.  Both of these moving averages are important levels that traders look at, so staying over those averages is critical.

Many of the market leaders had REALLY strong days today which shows the market is starting to rebuild and larger investors want to start putting money back in.  Apple broke 400 and held it at the close, Hansen hit an all time high, Amazon as well.

Now the bad news …Volume was better today, but not great, and most of the indexes formed what are called dojis which signals indecision among the market.  The Semiconductors which has been the sector leader during this short term rally made gains today, but not on their Bollinger Bands and their volume was especially weak; this might be the negative divergence that will foretell a down move on Monday .

The financials which have been dragging for awhile now are still doing little in this rally … generally in a strong rally we need the financials to perform right next to technology and small caps … 2 out of 3 maybe is ok??  Obviously with the state of the world right now, I dont expect to see much strength in the way of financials in the coming months, whether that will drag on the rest of the market time will tell.

All in all, I still remain cautiously bullish and will most likely add to positions if we have an organized down day (organized … meaning not a free fall).

Have a great weekend!