Skeptical of the Upside

As suggested prior to Tuesday's trading, we did get a rally, but it was brief and subdued, and it was immediately erased on Wednesday. However, I doubt if that is it. My indicators are still oversold, and I expect more on the upside in the next few days before heading lower. But to reiterate, the damage done to the averages in the last week is very worrisome. It appears to be a more important change of direction. 

Looking at the first chart, below, it is apparent that the Dow is at, and trying to rally from, an important support level established in mid-December. I anticipate that rally to be more than the mere blip we had on Tuesday, but it could well be the formation of a second shoulder in a typical head-and-shoulders top. In actuality, a case could be made for saying that the market quit its advance way back at the end of November and has been building a top ever since....259 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.

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