Price or time or both?
How bout that for a minxy tape (Toddo term)? The market is higher the day after the Prez's State of the Union Address. Is that based on what came out of the address? No way, but I can see the headlines for tomorrow anyway; "...market responds favorably to State of Union Address." If the gains don't hold, the headlines will be "...nervousness after State of the Union drag stocks down..."
The movement here is mixed because that is the message that everyone is getting from the geo-political, economic and technical perspective. As Toddo points out, the daily stochastics are actually about to or have begun to turn positive. Please take a minute and check out the charts of Monday morning's opening article. In the first graph it outlines...ahhh, what the heck, let's do a reprint.
Exhibit 1 - a reprint from Monday's article.
As you can tell, the initial oversold condition, after retreating from a severely overbought position, in the context of this bear market has been a better sell signal on a bounce than a buy signal until all the intermediate-term stuff gets washed out enough. This is why Toddo has been reinforcing larger direction and readiness to fade the rally.
As I mentioned this morning, we are a few percent and/or weeks away from that happening. A few nasty days or sideways weeks could get the intermediate-term stuff low enough. Which do you think it will be? The market is showing signs of heading toward an intermediate-term low like October, but my research suggests it is still a bit away in terms of price and time.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Daily Recap Newsletter