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Dave Fry

Stock Markets Are Getting Oversold And Institutional Traders Could Step In At Any Time To Push Things Back Up

By Dave Fry on May 14, 2009 | More Posts By Dave Fry | Author's Website

Retail sales and foreclosure filings were, ahem, “worse than expected”. Markets have been looking toppy and moving around on light volume as indicated in previous postings. But dip buyers have been persistent even when the news was bad but spun as “better than expected”. Not so today.

Breadth was decidedly negative but volume remains modest.

Dave’s Daily turns to daily charts since occasionally, like now, they’re significant. You can see clearly how many markets have responded to the 200 day Moving Averages. Sometimes these act as resistance and then support if surpassed.

Markets often end a run in an ugly manner and this may be what’s taking place now. It’s really hard to know but clearly the news hasn’t supported this major rally despite stress tests, green shoots and other happy talk. For a trend follower, the news must follow the trend. That’s the fuel any trend needs whether bearish or bullish. I don’t see the supportive news. The markets are getting oversold and Da Boyz could step in at any time to push things back up. They have a lot at stake in that regard.

Finally, I won’t be publishing tomorrow as my wife will be undergoing surgery tomorrow and I’ll be at the hospital all day.

Disclaimer: Among other issues the ETF Digest maintains positions in: SPY, MDY, IWM, QQQQ, XLY, XLB, XLU, IYR, IEF, TLT, TBT, UDN, DBC, DBA, MOO, EFA, EEM, EWZ, IFN and FXI.

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