While the NASDAQ looks poorer due to its major overweight with Apple, the S&P 500 continues to leave us in limbo. Despite the three week bounce it has yet to create a "higher high" versus the last high about a month ago. It also is facing a downward sloping 50 day moving average which thus far has been a ceiling. Seeing both of those change, with the former being the first step would open the door to a change in intermediate term direction. Time is of the essence as the 200 day is also beginning to flatten out – seeing this longer term moving average flatten and potentially slope down concurrent with a downward sloping 50 day? That would not be a positive. This is what is happening in the NASDAQ. This is what the bears have in their camp technically at this time.
For the bulls, while there has not been a higher high there also has not been a lower low – each time an intraday selloff has happened and the index looked poised to rollover buyers have stepped in. So we also have a series of "higher lows". Something has to give, and soon as there is now a pattern of lower highs and lower lows in place.
Any securities mentioned on this page are not held by the author in his personal portfolio. Securities mentioned may or may not be held by the author in the mutual fund he manages, the Paladin Long Short Fund (PALFX). For a list of the aforementioned fund's holdings at the end of the prior quarter, visit the Paladin Funds website at http://www.paladinfunds.com/holdings/blog