Stocks opened weak after Friday's employment report, but the bulls found their footing late morning and rallied for a mixed close. While it may seem positive that stocks firmed after bad news, keep in mind that stocks already priced in a lot of bad news with Thursday's sharp decline. Chart 1 shows the Dow Industrials ETF (DIA) firming just below 112.5 and closing with a small gain on Friday. Despite Friday's firmness, the rising wedge break and support break remain in play. One day of firmness is not enough to undo such a sharp decline. Also notice that CCI (20) moved below -100 to turn momentum bearish. In general, a move above +100 reflects bullish momentum that stays in effect until a move below -100. While this is not meant as a stand-alone trading system, I consider the move below -100 to be bearish and it confirms the bearish signals on the price chart. These bearish signals remain in effect until proven otherwise.

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Chip Anderson
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