Posted on: Tuesday, February 23, 2010 10:49 PM EST
The daily change in the MTR-TM was -1.28% with no change in the signal forecasted. The MTR-TM cannot issue a new signal for at least two more trading sessions.
The chart below shows that uptrend was not broken on the MTR-TM. The market may pull back further and touch or break the uptrend line. Pull backs off of +2 standard deviations (+2 Z-Score) are common in an uptrend. It is interesting to keep an eye on the news when the market reaches levels on the chart when prices hit short term oversold or overbought levels such as +2 or -2 Z-Score.
Many times these price levels (RSI overbought/oversold, +2 / -2 Z-Score, etc.) corresponds to negative news. We may see some positive news start to trickle out when prices touch the uptrend line which will help to support a continued up move in the market. The good news/bad news cycle does not always tie into areas of indicator extremes but many times it does. The news/market action at indicator extremes is a cause for wonder for conspiracy theorists if market (and news) manipulation is alive and well.
If RSI turns back up when the price retraces to the upper trend line it would present a lower risk entry or re-entry point into the market.
The uptrend is still intact on the major indexes.
