Again, most of the big players are on holiday.
Just after 1030 ET, the market started to show a possible topping with a $TICK divergence as the market tested the overnight high. We also could not get 2 to 3 closes above the high pivot. It was a good bearish sign. However, the market then refused to close below the low pivot.
The Advance - Decline Line also was refusing to weaken much beyond the low pivot. Buying then came back into the market.
Compare today's action to the action of the bottoming process on 12/29/08. We got a good divergence followed by a series of closes above the high pivot. The Advance - Decline Line was also confirming possible strength. This led to the current short-term bullish trend.
The current market just isn't ready for a short-term downtrend just yet. The rule of 2 to 3 closes beyond the nearest pivot confirmed by the Advance - Decline Line is a good filter.
Charles
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