According to Lee Adler of Wall Street Examiner, writing last night:
One more down day should begin to trigger intermediate sell signals. Many indicators are on the cusp and in negative divergences. However, if the market holds here, the uptrend would remain intact with a good shot at a higher high. There are no clear signals yet as to whether this is the moment bears have been waiting for. Things started to lean in that direction today, but $11-15 billion in POMO and $16 billion in Treasury paydowns will hit the market over the next two days. There’s more of a chance that the market will break on Monday when the Treasury will settle $68 billion in new notes and bonds. (See Treasury report).
(In Wall Street Examiner, Professional Ed., "The Moment Bears Have Been Waiting For." Click this link to subscribe risk free for thirty days.)
Note: I had asked Lee about Trader Mark’s comment earlier this morning:
The dollar went from +0.1% to -0.2% in the past 2 hours, and the market went from -0.4% to +0.5%.
Don’t over think it; if you are bringing anything above and beyond first grade logic to this market, it is too much. It just amazes me that literally armies of PhDs can’t come up with an algorithm a bit more sophisticated than "IF dollar zig THEN market zag."
Here’s what might be happening. The Primary Dealers, noticing some money laying around (as Lee explained, POMO money plus the Treasury paydowns), turned up the power on their HFT machines running the popular Zig-Zag program…. and there you have it. ~ Ilene
