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The one constant for the price action of stocks in 2012 has been the lack of downside follow-through on the many apparent topping candles or intraday reversals lower in breakouts. The main reason why I stick to my discipline of doing a broad market video review every day is to reinforce the notion of putting the day’s price action within the context of the overarching technical picture. During an uptrend, there are indeed countless times where it looks like the bears have truly regained the initiative on a single day or intraday basis. However, as we are seeing this morning, following-through to the downside is a much more difficult task to carry out during a trending tape.
Furthermore, those who shorted or sold their longs during the panic of yesterday’s precious metals downdraft and broad market choppiness may very well be the ones who find themselves on the grill, rather than the buy-the-dip crowd. I am seeing plenty of charts still intact, with respect to their recent technical basis and consolidations of the initial push higher in late-2011/early-2012. As has been the theme of my posts for several weeks now, we need actual evidence that the market is on the cusp of weakening to the point where it is correct to become highly defensive, rather than a passing whim, nagging headache, or a sharp growl from the stomach.
As the session rolls on, I am looking to see if this upside move sticks. I continue to watch the transportation stocks, as well as the recovery in the precious metals and miners. A few other names to watch: DFS DKS FLEX SCSS
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You nailed it, yesterday video review… Hat Tip… cheers…
GOLD bottomed!!!