Thursday 11/4 - Morning Comment
Looks like more consolidation of recent gains ahead. To make communication clearer, I am going to define a couple of terms. Consolidation is basically a sideways movement. A correction is a deeper retracement of the prevailing trend. Neither is a reversal of the existing trend. However, they could lead to a reversal of the trend if they are not followed by a continuation of the trend in fairly short order.
The QQQ is not participating as much in the rally as is the SPX and Dow. This is not a concern at this point. I mentioned earlier that the Dow and the SPX were playing catch up. Now they have caught up. If the divergence persists, it would become a concern.
After some consolidation/correction we should have another stab at the overhead resistance mentioned yesterday. This is when we will be able to tell if the short term uptrend can continue or needs a deeper correction.
Andre
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