Sellers jumped on board positive early action once again today, with a mixed close run on decreasing volume.
Officially, the Dow industrials closed flat on NYSE volume of 4.8 billion, while the NASDAQ dropped 0.2% on 1.9 billion. The leadership profile remains positive, with 352 stocks making new highs versus 49 making new lows.
The short term momentum oscillators remain negative, non-confirming the bullish stance of the AlphaKing Trading Indicator for the NASDAQ (while the Russell 2000 AK Trading Indicator remains negative.) We have no new trades at this time.
The market continues to show signs of distribution selling on each and every rally attempt of late - including today - though the bears have yet to deal the killer blow that forces a deeper correction. We remain at a pivotal moment in regards to the next hard trend move, as any continuation of the rally would result in a potential melt-up rally into year-end, while any failure of the stock indexes to hold moving average support shown in the charts below would open the door to a serious and fast correction.
Sideways action is either a base or a top, and we plan to follow the markets in whichever direction they decide to go in, with a decision in this trend/momentum dilemma expected very soon. We are happy with our short positions, though have our long picks ready to go in case we need them. Buckle up, lads, as the fun is about to start.
401K investors should be invested in a money market fund.
Kevin Wilde, Chief Trading Strategist AlphaKing.com.