Bobby--I follow several indices and A/D summations (regular a/d and volume a/d) in at attempt to statistically determine the direction of the trend. Today was significant in that several of my indicators turned positive including the NYSE, S&P 100 and 500, Transports, Utilities (actually went + on Oct 1), and NASDAQ Composite. DOW is close to positive and A/D indicators are still negative but it wouldn't take but one good day to turn them positive.
So, what does this mean? My interpretation is that we may have put in a short-term bottom here. The dead stuff is showing life. Probably okay to enter on the long side, although it could be that we have one more shot at the downside before we finally start for an assault on the highs.
I find it incredulous though. This market is so out-of-whack with reality that I just cannot believe that we have a big blow-off rally ahead of us. Doesn't this market have any shame? It is October, afterall.
Yet, I have to recognize that the Fed, via recent McDoughnut and Parlay {g} comments, has been signalling that they are not about to rain hard on anyone's parade, especially when the market has been knocked down 10% on the DOW. They don't want a crash, nor do they want this thing to get further out of hand. The corrollary is that if the market goes up dramatically, they will find it feasible to let it rain. In consequence, it still seems to me that cash is the best place to be, regardless what my signals say. Nevertheless, I have gotten burned in the past ignoring them.
Here is hope that the Fed will see today's action as a slap in the face and seek to punish the market for such flagrant impudence. Well, one can hope, can't one? I know it won't happen, but it should.
Cheers! |
