Friday, October 30, 2009

Signs of a Trend Day to the Downside

Well, I posted on the topic of a trend day to the upside; I guess it's only fair that the market show us some dynamics of a candidate trend day to the downside.

What are the tells?

* Inability to take out overnight highs on economic news;

* Break below the opening price range (blue line);

* NYSE TICK consistently negative;

* Intermarket themes show strong dollar, weak commodities;

* S&P 500 sectors consistently down from their opening prices;

* S&P 500 Index trading consistently below its volume-weighted average price;

* Volume in ES futures consistently hitting bids over lifting offers;

* Price consolidations at successively lower prices (blue arrows above).

If this is a trend day to the downside, the Thursday lows should now act as resistance for any midday bounces.