by Jeff Pierce, Zentrader
I think how the markets respond tomorrow is important. After a low volume decline over the last few weeks of August a majority of traders and fund managers come back to work this week. If we can get over what I deemed as key resistance (see below) and stay over it, then the markets have a good footing to build on. We’re just a stone’s throw from 2013 highs on the Nasdaq.
We bounced out of minor support today but the more times we keep hitting it, the weaker it becomes and the likelihood that the summer doldrums will persist.
Mergers like the Nokia purchase by Microsoft can be good for the markets. Today we started strong, fizzled mid-day, and rallied into the close. Tomorow (Wednesday) is important for the general markets to get some follow through going to Tuesday’s rally.
Solars are leading the way. When we start to see more stocks breaking out like the 2 below, then it will be safe to become aggressive on the long side.
However, as for now my timing signal remains down on DOW/NASDAQ.