It is not obvious on this chart whether the action so far in November is consolidation for an advance or for a decline. That we will try to figure out from our daily and intraday charts.
Before moving on to equities, let's take a quick look at the bond chart. Notice the heavy volume sign of weakness on October 8 and 9. There has been no upward move in response to the weakness in the equities. Today was a weak day with ease of movement and the wide ranges and ease of movement have been on the side of the bears since 10/1. This market does not anticipate any tightening by the Fed tomorrow.
This is a difficult chart. After our possible selling climax last Friday, we had a reversal day yesterday, and a possible test today, where the market went down, found either no selling or found support and then rallied to close on its high. The last 5 days could be the same kind of reversal up down pumping action we saw at the recent top. We have just given the argument for a low and a rally to begin shortly. While it very well might be true, today had more supply than the days after the last three lows, August, September, October. We have shown no ability to levitate like after the last three declines.
Please notice the up down pumping action on the hourly over the last two days. This ordinarily would be an easy bottom but it has gone on too long and although we broke out of it the market has not been able to rise easily yet.
Yesterday the rallies after 1Pm, 2PM and 3PM all showed ease of movement. Today, the declines showed no ease of movement and the rallies continued to be easier to induce than the declines. So the immediate trend is up. However after a day and a half of easy rally we still have gone nowhere, because the selling is so present. I expect this rally to continue until some kind of ending action but I expect heavy selling into the rally to accompany it.
