My observation regarding this market is the lack of follow through. We receive bull signals and bear signals, but then the signals lack any follow through action. This is characteristic of a market that is puzzled and uncertain. For instance, on yesterday's close, both the Industrials and Transports ended at record highs. Normally this should be followed by an explosively higher market today. But that has hardly materialized.
Below we see the Dow in a megaphone formation, better known as a broadening formation. This is the pattern with five alternating reversals. Following the fifth reversal at the upper trend line, the pattern usually breaks down. Whether that type of action lies in the future remains to be seen.
Whoa, what’s this? The employment figures came in under expectations. On that unwelcome news, the major averages halted their rally.
As I write, 15 minutes before the close, the Dow, Transports and the NASDAQ are all ... Log in or subscribe to continue reading.