Good Morning Traders!
Economic data sent the $ lower and Bonds higher from breakout chart formations. The Russel had a steady rally while cross current selling in some of the big cap blule chips made for a choppy trade. The Rus and SPs made higher highs, the the DOW and NAZ put in lower highs. The ticks had the lowest high in the past 4 days – usually a loss of momentum. Volume was also on the light side on Friday’s rally. Big picture, some of the over bought big caps can be consolidating to their daily EMA (IBM, V are examples). On the other hand, rotation has led to good upside momentum in other shares – the DJTransports made new highs, with strength in the airlines and an upside breakout in JBHT. The market can remain in a consoldiation mode for up to 10 days after new momentum highs on the daily 3/10 oscillator. Friday was day 7. At that point, 10 day sell divergences can hit (10 days +/- 2 days) or, a continuation pattern can resolve in the direction of the trend.
EC, AD, US, GC, HG – z day consoldiation after range exapnsion can lead to buying opportunities on 30/60 minute grails.CD has had = length swings down on the daily charts now – watch the 5 SMA on an upside reaction. Wheat had a bit of a selling climax. (range exapnsion, increase in volume at the end of a swing) and Cron had a classic bear trap formation – flush below 20 day lows, now back up into the middle of the daily range. Good chance it can now test the upper end – see chart examples!