Looking through the charts tonight, i'm finding a ton of long term supports coming into play. We're at the point where trend lines from the 2009 and 2011 lows are all coming into play in various sectors.
In many cases, these trend lines are clustered, so layers of support are present. At the same time, if clustered lines are broken, they can lead to the rug pull effect and create a sudden drop. Let's not get ahead of ourselves though.
Construction has found trend support from the 2011 lows. Maybe i'm just nostalgic, but this seems like a decent proxy for the long term trend of the economy and stock market.
The consumer ratio has reached a meaningful support level. Although this has moved most of the year, the major trend is still higher.
The allocation ratio (stocks relative to bonds) is at a level that's been support for over a year. Can it hold here? Or has this turned into a major top?
DBA is testing it's falling 10 week average. Is this short term rally already just about over?
Energy relative strength is a train wreck. Now it's even breaking the support boundary from 2008. You want to talk about a bear market? This needs to shape up fast.
Biotech has held up as it tested the September low and 50D MA. Various biotech stocks were going crazy today. It wouldn't be a surprise to see that continue Friday.
Some quality growth stocks on my radar, in strong long term up-trends, tested rising 50D MAs today.
Trade 'em well!
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