The retail sector fund RTH has been coming under pressure in recent sessions and the daily chart illustrates the lack of enthusiasm behind the upward drift in prices during much of October.
Today's employment data will be closely monitored for further clues as to the longer-term prospects for economic activity and there is the possibility that either a robust report or a very weak report could propel equities into range expansion in either direction.
With the release of September's employment data later in the week and the mid-term elections on the horizon it appears that asset managers are biding their time in a holding pattern, but range contraction and procrastination can also be precursors to increased volatility and significant directional moves.
While broad market sentiment still seems to be favoring the soft landing scenario, the downdraft could pick up some near-term momentum if the Nasdaq index was to falter in the 1680 area.
The decision by the FOMC to leave rates unchanged was entirely in line with expectations and traders seem to be increasingly comfortable with the soft landing scenario.
The extent of the May/July 2006 correction is clearly visible in the charts, but it is also pertinent that there was no violation of the pronounced upward channel that coincided with the weekly lows during this time frame.
Evidence is mounting that the momentum that has powered the strong performance of the indices since Labor Day is beginning to dissipate and this can be seen on the SPY and QQQQ proxy charts.
Copyright 2024 Tiger Shark Publishing LLC . All rights reserved.
It should not be assumed that the methods, techniques, or indicators presented on these websites will be profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples presented on these websites are for educational purposes only. These set-ups are not solicitations of any order to buy or sell. The authors, Tiger Shark Publishing LLC, and all affiliates assume no responsibility for your trading results. There is a high degree of risk in trading.
Free Festival of Traders Videos
full story
printer version