The S&P was up a bit after a late session rally. The other indexes were down a bit. My shortest term momentum indicator in the S&P and Nasdaq has turned down in the direction of the main trend. My confirming momentum indicator has flattened but not yet turned down. Also, prices opened and stayed under the three day pivot. Volume was very light and range was small, especially in the Nasdaq, in the pre-holiday session. Also, the close was a bit higher than the open. If this was not the Friday before a three day weekend there may have been more conviction to the down move today. There seemed to be a lack of interest in pushing prices down and shorts gave up allowing the indexes to recover much of the drop by the close. It is difficult to make too much out of the action today. If prices can stay under the three day pivot on Tuesday it is likely momentum will turn down with more conviction and volume. I will watch market action when the market re-opens on Tuesday with an eye on put buying on indexes and selected bubble stocks.
Gold was lower, with momentum lower but trend still holding up. Prices are creating overlapping bars. The is a small triangle forming, which could be continuation or reversal. With momentum down I’m looking for a downside break. This would also create a bearish head and shoulders formation. But the trend is still up, so have to respect that and look for much evidence before taking the short side. Picking tops is usually a losing game. The Baltic Dry Index has rallied back up to the $7355 level. This could lend support to the China and commodity and spill over into gold, as least temporarily. I’m taking the weekend off. I’ll return on Tuesday with charts.