The Dow is clearly below its May trading range lows and twice tried to rally above this resistance and failed. There is no sign of a bottom, no ability to rally and the market is on the hinge. The
bloggers seem to believe the market will rally into Goldman's earnings, a nice theory, but not necessarily supported by this chart.
This chart found support at the April highs after decisively breaking the May low. So far it too has shown no ability to rally.
I used the chart of
BGZ for our daily chart because the brewing scandals about Program trading and sniffing order flow coming into the NYSE for the purpose of front running it, might be effecting the volume numbers. This type of parasitic trading accounts for 70% of NYSE volume. The best and the brightest minds in finance pride themselves on how smart they are because they figured out how to steal billions of pennies a day from the elderly, the retired, widows and orphans without anyone knowing. We will now turn to the chart to use low tech skills that our brilliant competition has long ago forgotten. The increasing volume on July 2,6,7 is the harbinger of a large move as traders move into the stock seeing the play that is developing. July 7 we exceed the highs of May 21 and June 23 and volume, when price is giving renewed evidence of an upward trend, volume gives a climaxing indication at over 20 million shares. Volume however falls off sharply and price does not follow through on 7/9.
Turning to the daily for Friday, the market from the outset was supported and rallied sharply only to meet even heavier selling at 88.49 and the long red bar that immediately followed it. This bar tells you
unequivocally that heavy selling is out there. The market is again supported at 87.65 and rallies on diminishing volume to a lower high. Demand has evaporated in the bar beginning at 10:55 in a rally attempt that fails. After that volume picks up with prices falling to the low of the day. An outside key reversal bar ends the move. It is tested 2 bars later and more decisively at 11:55. Until 1:45 the rally is anemic, punctuated by volume surges that are promptly reversed. That this rally is so weak makes the upthrust to 88.22 probably terminal. It too was on pathetic volume and was immediately given back. Plus it looks like the sellers stuffed the buyers with shares during the closing 15 minutes and there was not even that much demand.
Just in case you do not believe our analysis that selling was dominant on Friday I have added the put/call ratio, to this chart. Look what happened to it during the trading range between 2:50 and 3:30. Price was not moving and someone was buying puts like crazy. It takes a lot to move the put call ratio towards the end of the day as it accumulates over the course of the day's trading.
Put call ratio for 7/7 and 7/8 for your interest and study. Do not forget our much earlier post where I showed how the buying for the March low was in the options.
The Dow is clearly below its May trading range lows and twice tried to rally above this resistance and failed. There is no sign of a bottom, no ability to rally and the market is on the hinge. The bloggers seem to believe the market will rally into Goldman's earnings, a nice theory, but not necessarily supported by this chart.
This chart found support at the April highs after decisively breaking the May low. So far it too has shown no ability to rally.
I used the chart of BGZ for our daily chart because the brewing scandals about Program trading and sniffing order flow coming into the NYSE for the purpose of front running it, might be effecting the volume numbers. This type of parasitic trading accounts for 70% of NYSE volume. The best and the brightest minds in finance pride themselves on how smart they are because they figured out how to steal billions of pennies a day from the elderly, the retired, widows and orphans without anyone knowing. We will now turn to the chart to use low tech skills that our brilliant competition has long ago forgotten. The increasing volume on July 2,6,7 is the harbinger of a large move as traders move into the stock seeing the play that is developing. July 7 we exceed the highs of May 21 and June 23 and volume, when price is giving renewed evidence of an upward trend, volume gives a climaxing indication at over 20 million shares. Volume however falls off sharply and price does not follow through on 7/9.
Turning to the daily for Friday, the market from the outset was supported and rallied sharply only to meet even heavier selling at 88.49 and the long red bar that immediately followed it. This bar tells you unequivocally that heavy selling is out there. The market is again supported at 87.65 and rallies on diminishing volume to a lower high. Demand has evaporated in the bar beginning at 10:55 in a rally attempt that fails. After that volume picks up with prices falling to the low of the day. An outside key reversal bar ends the move. It is tested 2 bars later and more decisively at 11:55. Until 1:45 the rally is anemic, punctuated by volume surges that are promptly reversed. That this rally is so weak makes the upthrust to 88.22 probably terminal. It too was on pathetic volume and was immediately given back. Plus it looks like the sellers stuffed the buyers with shares during the closing 15 minutes and there was not even that much demand.
Just in case you do not believe our analysis that selling was dominant on Friday I have added the put/call ratio, to this chart. Look what happened to it during the trading range between 2:50 and 3:30. Price was not moving and someone was buying puts like crazy. It takes a lot to move the put call ratio towards the end of the day as it accumulates over the course of the day's trading.
Put call ratio for 7/7 and 7/8 for your interest and study. Do not forget our much earlier post where I showed how the buying for the March low was in the options.
