Stock rally continues

q0213.pngStock indexes rallied today again. This time the Nasdaq/QQQQ had the larger percentage gain. Price is coming up to a resistance level. The trend is still down with momentum still up, as can be seen in the chart. The reversal back down yesterday (Tuesday) was a concern, but momentum increased even with a lower close, and the three day pivot (yellow dots) did a good job of containing the pullback. The trend lines are starting to come together, but these lines can squeeze together during a counter-trend rally, and then widen back out when the trend resumes. It is always possible a counter-trend rally can turn into a trend reversal, but for now I’ll assume the downtrend is still intact until price action negates that assumption. If this rally is to continue with an attempt of overcoming resistance, volume should pick up. Volume has actually declined on this little rally, which does not vote for much continuation. I’ll watch to see if volume can pick up if price gets up to resistance.

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