Today we had 6 new highs and 246 new lows. This is a major improvement, but in the short-term it doesn’t matter because of the consolidation and therefore, does not have any significance right now. I was able to find 5 clean breakouts, mostly from the industrials/materials sectors. They did lead the rally for most of today and the reason why I picked them in my last article is because they displayed enormous strength yesterday which was not demonstrated in price action, but volume. I always say that volume confirms price action, but price action doesn’t have to confirm volume. I advise all traders who are very short-term to be very cautious of extremely whipsaw next week.
We’ve had many breakdowns, but this time, they were harder for me to find….a good sign for longs. Before, I could have closed my eyes and randomly picked one and it would have been a breakdown. The market is easing up and consolidating from its major loss last week so I don’t expect many breakouts or breakdowns for the next several days. Like before, I’ve added my comments on how to prevent having your stock end up on my breakdown list unless you’re short.
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