TODAY'S BREAKDOWNS (NO BREAKOUTS!)

Well, all I can say for the market is, “Not Good”. Technically, the overall market already broke down if we don’t count the low achieved on October 12. This low that occurred on Friday on high volume was the absolute last level remaining before the market threatens to go into free fall again. Right now, the chances of a major rally to the upside are slim. After all, you need fresh buying power, a.k.a. Money, to fuel a rally, but people lost most of it, so who’s going to start and sustain a rally?

We are still consolidating and that is evident by the fact that volume is light. We should see double (or near double) the volume if a breakdown did occur. What may be almost certain is that this week is crucial in shaping how the markets will look like till the end of December. Keep in mind that this is still an ultra short-term trading environment, and that means it might not be a good idea to hold a lot of positions overnight. Cash is king in this market.

As for breadth, the trend as not changed except that we’re making hundreds of more new lows. The new highs tally couldn’t be more depressing. Typically, the number of breakouts coincides with the number of new highs (this also applies for breakdowns and new lows), but that doesn’t mean they broke out. In fact, I haven’t found a single one that actually made a clean break. And as always, I had to limit the number of breakdowns to feature. My notes this time will highlight loss prevention with emphasis on the 20-day moving average.

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