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However, this higher imbalance in the sell to buy ratio was large enough to where many of our short term indicators, such as the McClellan Oscillator and this week's BETS indicator reading of +20, now strongly suggest that we're not likely to see much more improvement than what was seen on Friday, and that a defensive posture should now be maintained for the next couple of weeks.
Well...after we got some momentum follow through from last Friday's reflex rally to start the week, equities rolled over on Tuesday, and then broke to new lows on Wednesday, in a week where the major market indices closed down about 1.6% on average. Looking at the breadth chart array this week and we see that selling was particularly heavy in the interest rate sensitive area, and to a lesser extent in the precious metals stocks, as government data continues to suggest that the US economy is showing definitive signs of expansion which would put added pressure on the FED to consider ending their highly accomodative monetary policy stance sooner than later. We should know more on what they're thinking this coming Wednesday when both the monetary statement and Bernanke's last news conference are made available for consumption. Finally, the BETS indicator saw some follow through to the downside as it moved to a -5 this week putting it below the zero line for the first time since since July 5th. Along with Wednesday's technical breakdown where we saw many of the McClellan indicators moving to new lows, this would continue to suggest our maintaining a defensive posture in what now should be a correctional sequence that will likely conclude before the early part of February. Have a great week of trading! US Equity Markets : US Interest Rates : US Real Estate : Precious Metals: Australia: England: Germany: __________________ Dave's LinkedIn Profile Technical Watch Twitter Page Technical Watch Facebook Page "As for it being different this time, it is different every time. The question is in what way, and to what extent" - Tom McClellan "An economist is someone who sees something happen, and then wonders if it would work in theory" - Ronald Reagan "What we see depends mainly on what we look for" - John Lubbock "The eye sees only what the mind is ready to comprehend" - Henri Bergson “Answers are easy; it’s asking the right questions which is hard” - Dr. Who - 1977 "You know the very powerful and the very stupid have one thing in common - they don't alter their views to fit the facts, they alter the facts to fit their views (which can be uncomfortable if you happen to be one of the facts that needs altering)" - Dr. Who - 1977