Stocks raced higher all day, until the final hour when profit taking reared its head. The SP 600 led the way with a 1.8% gain, followed by the Nasdaq's 1.62% gain, the SP 500s .97% gain, and the Dow Jones Industrial Averages .95% gain.
Volume was higher on both exchanges. However, volume was lower than the 50 day volume average and wasn't that much higher than Tuesday's slow day. Breadth was positive on the NYSE by a 3-to-1 margin and positive on the Nasdaq by a 7-to-3 margin.
The late day selloff combined with the lack of power of the rally in all indexes leads me to my conclusion of not trusting this rally. In a true follow through you normally see all indexes make strong moves over 1.75%, volume much higher than the 50 day volume average, and you always see a lot of nice bases/breakouts in leading stocks with good fundamentals. We had none of those today. No way can I even consider this a follow-through day. We are simply in day six of the attempted rally.
However, per my post yesterday, we are having an oversold bounce. Bullishness is at extreme lows on all surveys and bearishness is climbing to highs not seen since 2003. The recent Investors Intelligence shows just as many bears as bulls. Last time that number crossed was in March 2003. This doesn't mean we are going to rally here. The numbers can simply get much worse. But the oversold numbers in all oscillators that market professionals follow signal that we have to relieve the oversold condition. There simply isn't much fresh short-term downside momentum we can muster up. We have to have a failed rally that last a little while to turn the bears into bulls again. Then it is possible we can see further downside. There are a lot of ugly charts out there and very few nice ones.
The Fed is still out there next week so I expect the same kind of crazy volatility we have been seeing intraday, for the time being.
Keep a smile on your face, trades small, and keep cash heavy. Don't trust the bottom callers out there. You know who you are.
Have a great night. I shall see you tomorrow
New Swing Longs: CNU BARI
New Swing Shorts: ENDP SFC CNC
Longs Outperforming: HSR-63 PAY-34 SYKE LRCX-35 RNST CTXS-42 TSCM-143 DDS SMSI-88 FORR BAM-27 PCLN ABI CTCI-39 WST SKIL SHLD EGOV UARM BWP FCBP GISX OMNI-120 AKAM-110 BSML RAE SMDI-154 LCC-138 USEY EYE ACTG-117 SMST CVO-104 Q-65
Shorts Outperforming: GPI NAL MAFB WABC ELY AVID UNS
Stocks On Radar Screen: CME KNOT SWFT IMNY
2 comments:
Josh
Good work over the past few months- I have noticed but hadnt commented in a while.
We had a move like this in the markets in the summer of 2004 with 3 big waves down, but there are some differences. That said, if it was exactly the same we'd be just finishing wave 2 down.
this is my (humble) chart blog :
http://stockcharts.com/def/servlet/Favorites.CServlet?obj=ID1798149
I posted that bc I want Josh to see some of the maps I use etc, but not to promote..
best,
Elliot
Corvallis
Thank you, Elliot.
As for promotion. I welcome Elliot, lafayette, Y.Y., and market speculators blog.
If you guys want to promote you are more than welcome.
Why do I welcome it? Cause I know my stock record and market record can NOT be beaten. :) LOL.
J/K.
Anyways, posting and promoting as long as you are helping people is more than welcome.
I just hope that more people sign up at IP and stop reading it for free. It isn't going to be availble for free by the end of the summer. You will need to register and a paid service is not far away.
Thank you for your charts, elliot.
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