Short Technical Analysis

Overall, the past week was positive on the market (see my "Volume and Money Flow" post on May 23rd, 2010). The only negative thing was the strong negative opening on Monday, May 24 of 2010. The first fifteen minutes of trading on that day were extremely bearish. Basically, because of these 15 minutes of bearish trading, the indexes (Nasdaq 100, S&P 500, DJI and other are only modestly higher than the previous week close on May 21, 2010.

This week I'm not as bullish as I was last week. Yes, taking a look at the longer term chart, the odds are good that we may see a recovery to the higher levels. However, on shorter-term charts we may see some bearish signs

What exactly makes me worry is that the volatility remains at high level and that many technical indicators (Money Flow indicators, Breadth Indicators, Stochastics, RSI, etc) on the hourly chart have turned into bearish.

Another thing that makes me worry is that during intraday trading at the end of the session on May 26, 2010 we had strong bearish volume surge. For short-term frame this volume was quite strong, however we did not see strong up-side reaction on that bearish volume. Only one day (on May 27, 2010) we had bullish trading. If we do not see up-side reaction on that volume tomorrow or the day after tomorrow then I would consider a possibility of retesting the Lows seen on May 25, 2010.