November 13, 2009
The S&P 500 Index (SPX), and it’s tracking ETF the S&P Deposit Receipts (NYSE: SPY), both reached new closing highs this week, but on Thursday, November 12, they reversed hard and closed back below their previous October rally highs.
The Nasdaq 100 Index (NDX) did not reach new rally highs, but it’s tracking ETF the Powershares QQQ Trust (NASDAQ: QQQQ) did reach new highs before also reversing lower on Thursday. The failure of the NDX to make new highs is a bearish divergence.
This brings up the potential scenario of a bearish double top in the major indexes. The next few days will hold the key to a new bull rally, or a continuation of the late October correction.
Interestingly, Monday’s huge rally had a bullish volume surge on the NYSE with 16 to 1 up vs. down volume. This is an unusual event that occurred several times in March, at the beginning of the 2009 stock market rally.
The stock market is at do-or-die levels here.
The http://www.fibtimer.com ETF Strategy has a position in the S&P 500 SPYDRs and the Powershares QQQ Trust.
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