A lack of new financial developments fromEuropeled to a quiet day of trading
yesterday. The euro gained versus the U.S. dollar, which resulted in a mildly
positive response from stocks with the Nasdaq leading a minor recovery, up 1.5%
on average volume and with breadth at a positive 3-to-1. Yesterday's advance
within the Nasdaq bear flag that I first identified on Sept. 5 is still intact.
But there are two characteristics of this flag that bother me. First, flags that
extend for more than three weeks without breaking down "are open to
question" (Edwards and Magee). This flag started the first week in August, and
so it may be tiring. Second, our internal indicator, the Collins-Bollinger
Reversal (CBR), flashed a buy signal on Friday, followed by an up day yesterday
that closed above the 20-day moving average.
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