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Tuesday, December 06, 2011

"Lurch" has re-appeared...

Lurch, from TV series, The Addams Family: http://en.wikipedia.org/wiki/Lurch_(The_Addams_Family)

The best word that comes to mind to describe the market action for the past 4 days is "lurching," as depicted on the 15-min chartgrid below of the YM, ES, NQ & TF. Like the TV character, Lurch, the markets have been communicating "via simple inarticulate moans, which, much like the dialogue of Cousin Itt, his employers have no trouble understanding"...I imagine that only the market-makers understand what's been going on here...I'd be looking for a break and hold from this upward-sloping range one way or the other. It may be useful to watch the 50 (red) & 200 (pink) smas, as well, to see if they form a Death Cross pattern with the 200 sma curling down, or if price begins to move (and hold), with conviction, above both of them. They're threatening to reverse direction, but I'm not convinced yet.

I can only say that, looking at the Daily charts below, they're basically high basing and, other than the TF, made a slightly higher close today. I'm watching the lower channel line on the YM, ES & TF to see if they break and hold below. The laggard on this chart is the NQ in relation to this channel...however, the laggard in relation to current price and the 200 sma (pink) is the TF. If we see more strength come in on the NQ, no doubt, the others will move higher, as well...but the TF will have to hold its end up, too. In the meantime, I'm going to try and interpret "Lurch's" language.

The 4-day 5-minute percentage comparison chart below shows that the Financials ETF, XLF, led the attempted advances over the past 3 days...the laggards have been the Euro and the Commodities ETF, DBC...ones to also watch for any signs of renewed strength, or further weakness in order to, potentially, either confirm an advance in equities, or a reversal.