Tuesday, April 29, 2008

Bearish Bar But Fed Looming

Last week I showed how very low volume in a short-term uptrend is a negative. It happened again today along with some other action that hasn’t been constructive historically. Here’s a quick look at what happens when several negative all come together:

For those who would like to review the previous instances they were 6/2/94, 11/6/00, 11/13/01, 10/28/02, 11/29/02.
You don’t want to read too much into just 5 instances, but the formation has been quite bearish in the past. Of course as I mentioned last night, the Fed announcement Wednesday will likely have a larger influence on short-term direction than historical precedents.

1 comment:

Alex Marion said...

What are your predictions of market reaction to the fed decision? How has the marketed reacted to positive suprises, negative suprises, and no suprises in fed decision in the past (or more useful, when trading below 200 day MA). I'm also curious to see how markets react to the percieved final rate cut (participants betting all along on rate declines may take profits?) Just some thoughts Here's a link on that matter I just found too...