Stocks lower as chop continues

qqqq0221.pngStock indexes flipped back over to the downside today. Most indexes are flipping back and forth daily, and winding into a tighter pattern coiling up like a spring. Yesterday I had the S&P etf showing a sideways line and triangle with prices heading into the apex. Today I show the same thing with the Nasdaq etf. You can see overlapping price bars with a tightening, sideways direction. The momentum indicators are confused, with the longer term (black line) overbought, and the shorter term (white line) oversold. It is difficult to make a directional play at this time. Since the existing trend is down it would be logical to think the resolution would be to the downside. I will await a breakout and trade in that direction on the re-tests. Entering on the breakout could be difficult, as odds are high the first breakout could be in the wrong direction and the trader would most likely have bad trade location. Market usually re-test the breakouts, allowing a safer entry point. But they don’t always re-test so there’s always the risk of having the market run without being on board.
baltic0221.pngThe Baltic Dry Index had a little rebound rally, and prices look like they are rolling over a bit. As long as the index stays over the red dots I’ll assume the trend to be up. The dry shipping stocks have rebounded nicely after some spectacular downside. The implications on the chart for many of the commodity bubbles have not been realized yet, although many of the Chinese stocks and indexes have had some good downside action. They seem to be letting air out of the bubbles slowly rather than popping them.
Gold continues up, at least in the pit traded contract. Most of that action was catch up to the after hour trade in the electronic contract. The etf, which trades stock hours closed down a tiny bit after being higher most of the session. This turn-around left a small upthrust bar on the daily charts. This is probably not enough to signal any reversal yet as trend and momentum are still pointing northbound. A failure to hold the Jan 30th high would be a first warning of exhaustion, in my opinion. Crude has had a third move to its overhead resistance level, and the action today brought prices back under those three peaks. It will be interesting to see if prices can go back to the lower end of the large channel that has been forming over the past few months.