Here is the General Commentary from Briefing.com for the record.
<<General Commentary
The price action this week has been relatively encouraging for the few remaining market bulls. At this point, each of the major averages has gone eleven consecutive sessions without making a new low. By way of comparison, a comparable string has occurred only once over the prior six month time frame. So this is what we've been reduced to, you say. Rather than considering the magnitude of any leg higher -- counting our gains, so to speak -- it's now a matter of simply counting the days without a new low. Well like it or not, this is certainly part of the equation in the current market, which may not be all bad to the extent that it reflects on market sentiment.
At any rate, Thursday was a huge day for the markets on essentially nothing in the way of positive catalysts -- the big question now is where the markets go from here. Is the bias higher or lower? We're not going to randomly call the bottom now, as this has been less than judicious over the prior 29 months. It also tends to elicit irate e-mails from our subscribers, who seem to have eased into a collectively bearish mindset. Yet irate e-mails aside, what we will say once again is that the current picture on the Nasdaq looks as promising -- that is, 'bullish' for those who now like the chart upside down -- as it has over the past six months. Note that with the larger indices in essentially similar technical conditions, the same could be said for both the Dow and the S&P 500 as well.
For as long as the Nasdaq holds support in the area of 1,200, the neutral to positive bias should remain intact. Once you're operating within those parameters -- or within similar parameters of your own -- the larger, and nearly impossible question of whether this represents the bottom becomes irrelevant. Using 1,200 as your support of last resort, the downside is pegged at around 8% while the upside is substantially more sizeable. Note that adopting a '1,200 and out strategy' on Wednesday morning -- when it first appeared on our site -- would have limited the downside to about 4.7%. So timing remains a worthwhile endeavor even if the markets are severely oversold here.
On a quick technical note, keep an eye on how the major averages respond to their 20-day exponential moving averages. For six months now, the 20-day ema has been a real sticking point, particularly for the S&P 500 and the Nasdaq. Note that both indices cleared that level on Thursday -- the S&P 500 comfortably cleared its 20-day ema at 887, while the Nasdaq just edged above its 20-day ema at 1310. Just to round out the list, the Dow Industrials also cleared its 20-day ema at 8506 on Thursday. If the major averages can sustain their break higher, and begin using their 20-day moving average's as support, look for the near-term market tone to improve substantially.
Mike Ashbaugh>>
Don |
