Good evening StockBandits!
It’s been a mixed bag of late with the blue-chip senior averages (S&P 500 and DJIA) unable to clear their highs of a few weeks ago while the small-cap RUT and NAZ have each been making new bull market highs as recently as Friday and Monday, respectively. Essentially, it has raised the need to see some rotation take place to bring the S&P and DJIA up beyond their resistance zones, or else the RUT and NAZ may come under greater pressure given the lack of involvement by the others.
Keep in mind that the DJIA is the least important among these even if it is the best-known index by Main Street. Nonetheless, the new development in the past few sessions is the emergence of lower highs for both the S&P 500 and DJIA. Last night I mentioned I would suspend judgment, but today’s decline certainly invites concern and raised some eyebrows.
The lower-high argument is significant because it shows that sellers are getting active ahead of those levels rather than accumulation taking place the way we see with most imminent breakouts. That is the biggest thing to watch among the averages right now until we see unanimous breakouts occur.
Short-term declines aren’t a bad thing, but the longer the lower high scenario stands, the greater attention it will get. That makes this an important area to defend for the bulls in the days and weeks ahead. Today, they lost a battle.
Let’s get to the charts.
Bullish Watch (click for charts)
Bearish Watch (click for charts)
Trade Like A Bandit!
Jeff
