This is the chart I most wanted to see after the markets had that massive selloff into the close. The 10 day highs minus lows and 52 week new highs will both put in bullish numbers since they are basically high-of –the-day type indicators. The 40 DIP index, however, is an end-of-the-day indicator and is all about the close. Any strength in the other two indexes can be confirmed with the 40 DIP.
All three indexes put in higher readings than Tuesday in the 40 DIP. This chart does not go bullish until we get a crossing of the 20 DMA but before we get there we need to head up and today we made just a little progress.
The weak hands sold into the close today as the lighter indexes like the Dow and S&P 500 sold off hard. The broader markets showed a little more backbone and hung in for a green close. We will continue to see this shaking out of weak longs until the sellers all dry up and the market begins to move in the direction with the least resistance hopefully up.
