Stocks Drop

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Stock sold off hard today, especially in the last part of the day. Intraday the QQQ bounced off support and was actually up for the day at one point, but selling pressure resumed and all indexes close sharply lower. On the one I was worried about the advance decline divergences, downturn in momentum, and those upthrusts a few days back that attracted selling. On the other hand the momentum downturns were not accompanied by much divergence, and the last impulse move up, especially in the Q’s, was very strong indicating a market still in bull mode. The impulses up were long and steeper than the reactions back down. That could change if the downturn gathers momentum. There are always shakeouts to make traders think the move over. The chart above takes a step back to look at the larger picture. I would like to turn bearish, but I think there will be more tests to the upside. If so, then there will be more information to call a top. My gut says it’s premature at this point. If my trading bands turn down I’ll have to pay attention to what the market is trying to say. Gold recovered a bit and uptrend still intact.