- In Big Picture Comments
- Last Updated: 01 March 2014
- By LA Little
There are plenty of clues out there that this market should come back in - but it hasn't. All the classical TA stuff says it should. Heck, the neoclassical TA is worried as well but there's a big difference. We don't have anything but tests to work with to suggest failure and each time we have had a test, it has failed to produce a retrace. Each time the market tests to the downside there are no sellers and thus we simply gravitate higher.
This morning is an example of the same thing. Yesterday there was a test failure of the top of the range on the DJIA but it came on heavier volume. So it only succeeded half way. The buyers were there, they just backed off when they could push it even farther. It's not as if the sellers stepped in. So this morning, they are back at work - buying again. Futures are up a bit as a result.
The market is a big testing machine. You keep testing in the direction of the move until sellers actually step up and sell. Until they do and do so in a larger way than the buyers, then price will gravitate higher. Period. All the other stuff doesn't matter. There has to be evidence of real selling to move the market lower or an absence of buyers relative to the amount of selling pressure present. That's what one has to gauge. All this other stuff is excuses; excuses for what you want to happen not what is happening.