Sunday, May 24, 2015

Looking For The Golden Ticket

The Market Trend Model (http://bitly.com/M_Trend_Model) continues to show a positive bias as the current stock market grind forces bulls and bears to search for the elusive golden ticket.  At the moment both buyers and sellers have reasons to believe the stock market indexes are on the verge of "making a move" to higher highs or lower lows.  

Bulls can remain confident that the recent breakout has held its ground as the market continues to consolidate on ever decreasing volume ~ an indication sellers are not eager to part with their stock shares.  Bears can hold out hope that the lack of momentum and the tepid follow through of the recent breakout indicates buyers are less than enthusiastic about pushing stocks to higher prices.  

At the moment both buyers and sellers are correct in their respective market assessments.  While the recent breakout appears to have lost some of its steam, the absence of significant selling suggests consolidation before the current trend upward resumes.

In my view, the glaring bear case lies within the Russell 2000 where its daily chart is forming a head and shoulders chart pattern (http://scharts.co/1b4HG2p) and its weekly chart is still building a bear flag chart pattern (http://scharts.co/1Eesw83).

A more bullish view can be made of the Nasdaq, Nasdaq-100, and the S&P 500 as these indexes appear to be consolidating recent price gains in a very neat and orderly fashion.

It just may be the Russell 2000 continues to under perform the other market indexes and a repeat of the 2014 bifurcated grinder market occurs in 2015. Whichever way the market goes, be mindful and be nimble.