MDM - Intraday market update July 5, 2011
IBD went to a buy signal without a follow through day on July 1, 2011. They also did this in the past with negative results.
While Market Direction Model does not follow IBD, it can use a follow through day as the initiation of a new buy signal or confirmation of a prior buy signal it may have issued.
In the meantime, we are carefully watching the leaders whose action will push the model either into a buy or a sell signal.
In other areas, precious metals are in a basing pattern which is typical of this time of year. May-July are typically periods of weak demand which result in basing or downtrending patterns in precious metals. Light summer trading volume adds further to the odds of a basing pattern being traced out.
Once quantitative easing manifests as QE3 and/or in substantial quantity from other debtor areas of the globe such as the UK and Europe, stocks and commodities should be the beneficiaries.
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