November 10 2009 – A day of pause

After a few strong days we’ve had some quiet consolidation. The sessions range was low as was volume. Prices rotated back and forth without conviction. We stay with the view that the Dow Jones Transports index is still not confirming the bigger index strength. Also the broader indices, such as the Russell and Wiltshire, are also lagging. The latter group have also made a lower low. Bottom line the market is playing tug-o-war right here and whilst our daily momentum indicator is now UP its also diverging from earlier readings. Trade cautiously and remember any hype about new highs in the Dow may not be the true underlying story.

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