Downtrend Over

Today's puny six point gain in the Dow took us right off the right edge of the steep downward trend established only last week. According to the RTC method, this means that downtrend is over. What really strikes me about today's action though is the unusual size of the doji candle - a range of 182 points between the high and the low for only a six point difference between the open and the close. This represents the second recent rejection of the April highs. Unlike some, I don't consider this to be particularly bearish. It often seems to be the case that big resistance levels take three tries to crack. Third time's the charm, as they say.

The only thing that's clear about this market is the extent of the indecision, fueled obviously by tomorrow's elections and the upcoming FOMC follies. According to the RTC, we should not be looking for a major decline in the next day or two. It's pretty obvious that the action in the next two days will be dominated by the election and the extent to which the eventual results are or are not already baked into the market. We'll see. For the time being, I'm still mostly standing aside.

Today I tried to buy some more DHY but it ran away from me and I couldn't get executed. ("Ran" is perhaps too strong a word, but I just wasn't willing to chase, even a few pennies). What I did do is buy 100 shares of LOW at 21.49. In retrospect I should have waited, since it closed at 21.19. But it's looking oversold to me on both the RSI and stochastic so I'm going to give it a chance to perform.