Stocks lower, gold and oil higher

indexes0409.pngStock indexes fell again today. I didn’t update yesterday as there hasn’t been a change since the post from last Friday. Also, I was trying to get my taxes done. I didn’t want to wait until the last minute this year. So this year I’m getting them in a week early. That’s a slight improvement. Regarding the past from Friday, I pointed out the short-term momentum divergences from the overbought area, as well as those small upthrust bars. The upthrust bars were not quick price moves up with quick rejection, but rather quite a bit of trading activity with higher values being accepted, as seen using the volume distribution profiles. However, when price wasn’t ready to push higher, the path of least resistance was another test back down, which occured. Lower prices today did find some buying activity. You can see on the chart of the S&P and Nasdaq etfs where I drew in bands of possible support. The upper lines in the pairs were drawn near the previous pivot, and the lower lines from past pivots or upper bodies of candles. My usual moving average lines (not on this chart) also shows price coming in between the two uptrending lines. Momentum is still down. Some traders would have resting orders at possible support areas, but I find it safer to wait until momentum turns back up in the direction of the trend. I often get bad trade location by waiting, but I also usually avoid catching a falling knife when support fails to hold, which it often does. It is encouraging for the bull case that this very negative looking market was able to shut off the selling and attract buying interest later in the session. Volume is still relatively light. If this general area can hold and momentum should turn back up with volume increasing, then there could be another impulse to the upside, and perhaps a bit less tentative.
The dollar fell once again. It seems to be building a very symmetrical triangle. If it breaks to the downside it would obviously be a continuation pattern, but after such a long down-trend, it could be setting up for a reversal up. I’ve been looking for any reason to get bullish the dollar. Every time something set up it failed and the dollar resumed the downtrend. At some point it will reverse the trend. Gold of course rallied on the falling dollar, in a counter trend move to what seems to be a downtrend. But that downtrend would most likely be short lived if the dollar breaks to the downside of that triangle. I’m still skeptical of these still crowded trades. Oil blasted to new highs in its still strong uptrend. One of these days fundamentals will overtake this market and the momentum chasers will rush for the exits.