Stocks Lift into the Close as Volume Subsides

Although the late day push into the close was a nice touch added at the end of the day the lack of volume highlights the lack of conviction.  Precious metals and the dollar were once again near the top of the headlines, but the continued decline in oil prices keeps selling pressure on oil stocks.  Gold did find support near its 50dma closing near its mid point of the day.  All the while the US dollar index had issues with the 76.00 level.  The action seen today is just another reminder we remain in an uptrend, but one with flaws.

The flaws are quite simple to see and those are distribution followed by a sell off to the 50dma and a subsequent rise on low volume.  Our pattern has yet to deviate itself since August.  However, there is one wrinkle and we are seeing it with the small cap indexes.  So far they have put in a lower low and a lower high.  If we were to see the Russell 2000 or S&P 600 take out its previous high this pattern will be broke.  But, if we do see another new low set it we are likely to see to lower prices for the small caps ahead.  Remember, this is speculation and we should not be trading on what “may or may not” happen.  Stay focused on what we have on hand and that is an uptrend with flaws and caution should be exercised.

The VIX had another tough day as the morning session brought in a bit of fear.

This market isn’t for heros and as we may be nearing its end there is no rush to heavily short the market.  Take cues from individual stocks and keep nimble.  Our chat room was quite busy with a few names and we’ve been able to take advantage of some opportunities.