Friday was the second day in a row that the market spiked higher and then sold off. Quite simply it is saying that when the shorts are done covering there is no demand at higher prices. Unfortunately the distribution is not yet complete as the 13 million shares before noon was very good support. Large interests will take advantage of it to sell more at higher prices. Notice how once it became clear demand had dried up, large numbers of shares were pressed on the market. If you thought distribution was just an idea, think again, because you can see it above.
In case you did not get what the market was saying, no demand above and the large interests are selling, it was kind enough to repeat it two days in a row.
Each box is the average true range of the last 20 hourly bars. The chart has flattened out at the pinaccle of a long rally showing that supply is inhibiting further progress. This kind of flattening can be indicative of distribution. On Friday, after making a new high, the market hinged at 1109.9 and sold off making a lower low. We still have not made a lower high that held. Although we can see the count continue to build, currently at 17 across the 1103.9 line for a count of 102, certainly enough to play for, the position without the lower high is neutral.
The current dollar bear market is severely threatened. I found one hinge, can you find others?
In blog land this is being called a bullish chart. Do you agree?Bedtime.
