If we are forming the right shoulder of a head and shoulders pattern on both indexes, here are the micro_trendlines to watch....

On the $SPX the highlighted green trendline will be at 1074.72, tomorrow, and for the $NDX the highlighted orange trendline will be at 1727.02. Both trendlines will normally be exceeded slightly before they will stop an advance. If they are exceeded by too much, then obviously something totally different is happening, and the markets have apparently not really topped...

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Comment by Mark Lytle on November 10, 2009 at 1:36pm: Chart for the above comment...

Comment by Mark Lytle on November 10, 2009 at 1:35pm: Yes, volume has declined on the most recent rally, but as seen in the chart, yesterday's volume was still only slightly below 'average' as defined by the 50 day moving average. This doesn't mean I've turned 'bullish', but one must be careful, the 'powers that be' are determined to wreck the dollar, and dollar wekness seems to translate to equity strength...That said, note the non-confirmation in the RUT against the Dow I have posted...

Comment by Steven Vincent on November 10, 2009 at 12:28pm: I looked at volume and found it to be very low across the board and in fact lower every day of this rally from the recent bottom. A volume breakout above 1100 is needed to turn the situation bullish. Until a major, puking bottom is put in this is a traders market and may be range bound, like Andrew said on yesterday's show.

Comment by BullBearGirl on November 10, 2009 at 7:21am: Thanks Mark. Glad to hear from you.

Comment by Mark Lytle on November 10, 2009 at 1:09am: Hello I'm back...Today's rally was a bit of an eye opener...My computer has been giving me fits for about a day, I have reloaded it and am operational again...The power of today's rally was surprising, volume was respectable, as was the point gain. I would assume short covering had much to do with it. No fatal damage has been done to the Bear case, but obviously, another couple of days like this one could change things significantly. The dollar is still involved with this, and today it hit support (again) at just below 75.0 or so. That support has to hold if the Stock market is to decline...

Comment by BullBearGirl on November 9, 2009 at 9:46pm: We haven't heard from you for a while, Mark. I'm wondering what your charts are "saying" or your current thoughts are on this market.

Comment by BullBearGirl on November 8, 2009 at 5:44pm: Thanks for the heads up Steven. I'll watch for the correct entry point before buying. Actually, FXCM is still having problems accepting my address the way it is. They keep asking me for more and more documentation. I could still be a few days before I have my account.

Comment by Steven Vincent on November 8, 2009 at 4:39pm: Don;t rush in! If the trade criteria set out are not fufilled don't jump in. Also be sure to set your stops as indicated and keep them. We could still see considerable volatility until the move happens or we could also be WRONG.

Comment by BullBearGirl on November 8, 2009 at 5:04am: Victor - I called my Forex broker and they are going to get the application processed within the next few hours. They said they were short-handed over the weekend and that was possibly the reason for the delay. It looks like I'll be able to get in on the currency trades Sunday night. Yay!!!