Is that all you bulls can muster?
Sheesh. So much for the hammers yesterday. You bulls had so much going for you. A severely oversold condition (600 points off the Dow in 3.5 days). A huge bounce-back rally yesterday and all the media clatter that accompanies it. The green patch in the chart below represents the entirety of the follow-through rally today.
Of course, the market fell in the end. I think people are kind of freaked out at recent market activity and didn't want to go into the weekend exposed. So there's still a chance of an upward push Monday. But it's clear to me that we bears own this bad boy.
5 comments:
This week has me reeling (in a fun way). I was also expecting a strong carry-through from yesterday. Though I am positive (in that my puts are making money), I'm not as strong as the market would indicate, which leads me to this: what do you folks think about CYMI? Broke below a long channel, but considering I've not been as dead-eye as I had hoped, thought I'd get some input...
Good hunting next week!
Guys, it was a fun ride last week, yesterday was a really good signal.
I hardly doubt that just because today the bulls didn't come back, that it warrants for any type of Bear party. Look at yesterdays volume compared to today's volume. Its like comparing the population of India, to that of Utah - there is no comparison, so just because today was red, doesn't mean that the bulls took cover.
We saw substantial volume follow through when teh markets were tanking May 11 to 24, and hardly any volume in comparison on the subsequent drop a week later. Yesterday's volume tells us something, the bulls are coming back.
The indices are all at pretty good support levels (I have a support on the Dow at around 10940, so right now, its a little below, regardless, a stronger dow support exists at 10720 ish) THe S+P500 is 6 points away from a really hard support level - 1246, and the Nasdaq is about 10 points from the lower support level in its multi year channel.
I don't see this bear market, that everyone is talking about - the lows are not lower yet - multiyear speaking
I also have started to see recovery in a lot of stocks that i was looking at for puts.
The only thing is that with all this economy data, its like bad news, always. Bad if its good, and bad if its bad. You know what I mean? That is gonna be pretty screwy with the markets next week.
Yesterday's hammer suggests that the bulls have got their construction boots on.
Bad one, I know.
Lighten up guys - if you think a Friday in June, July, or August is worth crowing about you all need to go back to analysis 101. Thursday represented the boys squaring their books before they took off for the weekend in the Hamptons. Friday was the usual "poor folks day" - so no money (i.e. liquidity) no movey.
I unloaded what I bought on Thursday on Friday morning just before the slide began. Took a couple of positions (including GM) in mid-afternoon.
Look at the weekly charts for a clue regarding the direction of the market. Looks to me like the run is ending and a turn is coming. How do I know? I don't "know" I just see that this week represented a huge blow off with large volume and at the end it began retracing. Part two - the largest volume print all week was Thursday's recovery. It was a third again higher than Wednesday. Friday was the weakest volume day.
Ignore the fed - since they are irrelevant to anything except to give the talking heads at CNBC something to talk about. Then, ignore CNBC as well. The only people around who make any sense are our host - Tim, Barry Ritholz over at Big Picture and Brett Steenbarger.
The only thing that matters is price. Observe the way price interacts with volume. Observe its volatility and the way it will ebb and flow over a period of time. If you can't "see" a stock as it slows down and begins to turn (in either direction) then I suggest you keep your money in your purse until you can. Practice, practice, practice - it is the only way you will get to Carnegie Hall AND the only way you will get rich betting on stocks.
As always thanks Tim for taking the time to run a lucid site and thanks also for prophet.net.
'cane - you seem to be a nice guy so I will tell you a secret - don't tell anyone else ok - what a stock "should do" and what it "does do" are most often two entirely different things.
Suggest you put a weekly chart of GOOG up somewhere and then put the Chaikin Oscillator on it. What you will see is that for a year now (beginning last June) the run up has been accompanied by a declining Chaikin. That suggests that the institutions are dumping. You will also see an interesting story being told by the MACD histogram. Right now GOOG is dead in the water - absolutely no movement at all. Interstingly enough your other favorite NTRI shows the converse of GOOG. Take a look - it's free.
My suggestion - don't plan on any more GOOG runs unless the institutions start buying again. But what do I know - just like everyone else - nada - I buys 'em at 3:45 and sells 'em at 9:45 and make a few quid holding risk overnight. It ain't classy but it's a livin'.
big rally (sucker's rally) forced many to go flat by selling out puts and covering shorts. next day was down AGAIN....trend down... large down volume was not needed to confirm that we are in a declining market, the price shows that there is NO DEMAND. I remain bearish and look for a new low which could provide a reversal.
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