Stock indexes recover

q0711.gif
The Nasdaq 100 as represented here by the QQQQ ETF made a very nice recovery today. I suggested a counter trend scalp was possible to the downside in the Monday post, and a scalp was all that it was worth, at least so far. The impulse move up was too great to suggest much of a sell off. Sometimes the daily chart can blow off and reverse but tops are usually indicated by much backing and filling along with momentum divergences. All trend indicators were firmly in place to the upside so very little downside move should be expected. It was interesting to observe today that the three day average of the floor pivot, which is the yellow dot on the price bars, acted as resistance all day until the last few minutes of trading, at which point it blasted right through the three day pivot. If prices cross back under this pivot on Thursday then the Q’s could try for another down move as the short term momentum indicator under prices on the chart is still pointing down. I still expect more to the upside but will wait to see if there is to be some backing and filling first.
spy0711.gif
The S&P, and a silimar situation with the Dow does not look as strong. Momentum indicators are down, as they are with the Q’s, but the pattern is setting up with lower highs and lower lows. The channel prices are drawing is getting to be a little too long to be regarded as a bullflag. Unless there is a clear breakout of the three drives up I would expect more backing and filling.