Posted on: Thursday, July 16, 2009 10:14 PM EST
The MTR-TM has had a run of whip saw signals. This is a reflection of the indecision in the marketplace, volatility, and short comings with back-tested automated trading systems. The market was in a down-trend with lower lows, but today was a break-out of that down trend. Still none of the major indexes broke support.
The rally was broad based with the Advance Decline Line (ADLine, see chart #2) breaking to new highs. The market moves over the last two days have been on about average volume. You would expect a break out like today to have seen a surge in volume but it was basically flat.
This whip saw action is being discussed in the forums.
NYSE, NASDAQ, Value Line, and S&P 500 all broke the down-trend line, but still below support.
The ADLine below was calculated in AMIBroker using around 7200 stocks. It broke a prior high showing that many stocks moved up in the recent rally. This took place on basically flat volume which indicates limited support for the rally and we may see a pull back.
