Rally Gets the Wind Taken Out
The market took off like a rocket this morning, with the Dow up over 130 points. But, as is so often the case lately, the market can't seem to make up its mind. Only about 30 of those Dow points survived to the end of the day, and some indices actually fell. The NASDAQ composite is a good example, exhibiting a bearish engulfing pattern for the day (the open is higher than Friday's close and the close is lower than Friday's open). I'm not sure how much longer the bulls can keep this up. Where else is the steam going to come from?
Hopefully as earnings season cranks up in a couple of weeks the market wil get some clarity as to its direction.
3 comments:
Earnings season - didn't we just go through this charade? If you take by that comment that I don't think earnings are worth the paper their printed on, you're correct.
Regarding "steam: - right now 5 out of the 9 spyders appear to be oversold and they could be on the verge of turning around. Two others are overbought and two are neutral, could go either way. So given that the SPX itself is in a neutral zone I still make a stronger bull than bear case.
Signs of an intermittent bottom on the DJIA appeared last friday. With today's price action it appears that a lot of steam is required to break out of the all time high of 11430. I think there was more profit taking than bear action on the way up. The bears are no where in control at this price, only weaker bulls cashing out.
pb,
11430 first, then we will talk :).
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