On Monday, the "bad, very bad" housing numbers drove the indices below their Friday lows, triggering the shorts on those markets that did not trigger on Friday. Today, more bad news from consumer confidence helped with some follow through.
One has to respect that fact that most of the major indices (no, not the INDU or the OEX) were able to break back above their 50 day MAs and are holding so far. Although the majors look strong when viewed from the move off the bottoms, we still do not have a strong indication of a trend reversal, with the 50 CCI staying below +100. The RUT and MID have trend line resistance right overhead, and all the indices have that terrible gap from 2/27. Our "canary" sectors remain weak.
So which way do we go? We have lots of "Fed head" talks the rest of the week, as well as economic news. So it is a toss up. No denying that technically, our shorts triggered, but if the indices hold their 50 day MAs a few more days, we will have a change of trend (in our system) to UP. The bears need to step up and assert themselves quickly or those gaps will fill in a hurry. And, although the indices are short term overbought, it is the end-of-month and end-of quarter which for some strange reason, always seem to have an upward bias. :)
