No Holiday Heroics

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At least as far as this Thanksgiving holiday is concerned, there will be no bullish heroics. Last week’s symmetrical triangle breakdown was legitimate to the point where plenty of trapped longs relied on hope as a trading strategy, and they are accordingly paying the price today with no reprieve from Mr. Market. The Dow Jones Transportation Average had been holding out, just barely, as a possible bullish divergence from the rest of the market. However, the trannies are rolling over hard today, clearly losing the key 4,700 level. Moreover, the Monday morning gap lower on the Nasdaq Composite needs to be respected as being a possible breakaway gap from a multi-week consolidation/breakout attempt.

The market is still oversold by many indicators, so I am not eager about putting on any new shorts here. I am trying not to get overly bearish here, as we are still well above the October lows on the major indices, and sentiment is quickly becoming dejected again. 2011 has been a tricky year from start to apparently the finish. It is apropos that Thanksgiving will not be a bullish feast. Regarding Christmas and New Year’s, well, that remains to be seen and is frankly of little help to trapped longs right now.