As we all know what goes up, must come down! Seems this morning we got some good news out of Europe. France and Germany said they agreed on something! Amazing! It was enough catalyst to get us up in the morning. True to the way things have been in the recent past, we gapped up in the morning and went sideways, until we found out the S&P had Germany and a few other countries on the watchlist for possible downgrades!! OMG! What a surprise!! LOL But, in the end the DIA was up 78 points!
Advantage: Bulls!
On to the charts. The charts are showing a bit of weakness the last 2 days. If you look at the chart of the DIA below you will see that for the last two days (Friday and Monday) the market gapped up and ended lower, creating ugly red candles.
Additionally, looking at a smaller time frame (see the intraday five-day chart below) you'll notice it looks like we might be building a little bear flag. And we all know what that means. What?? Excuse me? You don't know what a bear flag is? A bear flag is a pendant that marches slowly upward giving the bulls confidence that they're making headway........ only to pull the rug out from under them at some point down the road precipitating a large drop in price.
Advantage: bears
Nonetheless prices maintained its stance in the channel and overall we have to give momentum to the bulls. So for now it's.........
Momentum UP and losing a bit of steam,
All Trends UP
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