This is going to be a quick post, because it's nearly midnight, and even bears need their sleep.
The modest pop higher today in the equities market, as I said earlier, was healthy. Things played out pretty much as I've been anticipating – – – energy strong, gold strong, euro strong, and equities, not so much. The $INDU did a beautiful job pushing up precisely to its major 61.8% retracement level. This is the kind of "fighting back" that the bulls need to do in order to give them hope and exhausted any pent-up buying interest.
The broader Russell index is more reflective of the market's underlying lack of strength. This spinning top shows the market's uncertainty, and prices are toying dangerously (for the bulls) with that 23.6% retracement level.
Energy, in contrast, was quite firm and bounced from an oversold state. The $DJUSEN is the basis of the popular DIG and DUG exchange traded funds, and it pushed up nearly 3% today.
But this energy rally – like that of equities – will not continue indefinitely. I think the tinted areas below indicate similar periods when prices (here, for USO) consolidated for a couple of weeks beneath a fan line, only to succumb and resume the fall.
As I am typing this, the plunge in Asian markets is causing a somewhat weak GLOBEX. Once this bear wakes up early Thursday morning, it'll be clear what effect the latest economic indicators on employment have on the new day. Good night!
