I'm on alert here for extension of this rally. I see the bullish e-wave scenario. As you say, a lot of people were expecting to correct the past week of short-covering. Would it be unexpected enough if the correction was delayed until after one more high? A breakout would surprise a lot of people, me included, and would be bought "in soize". That could produce the kind of high necessary to finally go back down and retest this years' lows.
Or, was this morning the "correction" everyone was looking for? If so, they produced this morning's run, and are now done. If that's true, a retest of this morning's lows would fail. I don't yet see that happening.
Despite remarks to the contrary, this morning's run was NOT just the action of Ameritraders. In fact, I expect the data to show that they were not overwhelmingly buyers today. I continue to detect the smell of burning mufu Clownbux. Judging from the Trimtabs numbers, a lot of sideline sitters were pushed into stock funds for fear of missing out on the bottom. That money has to be burned before we get any down.
It's important to realize that tech doesn't even need net buying interest to go up here, just as it didn't need net selling interest to go down early last year. All it takes is for the pressure to come off, and the prices snap back. The selling pressure will remain off until the mufu redemptions reassert themselves.
Do I sound confused? Wishy-washy? I should, because I am. I DON'T KNOW WHAT TO DO HERE - and the important thing is that I know enough to step aside when I get into that position. There's a train leaving either way every day...
I remain a long-term bear, and I will not try to catch bear market rallies; I merely want to step out of the way to minimize risk and await the excellent shorting opportunities. I'm inclined to step a little further onto the sidelines, and wait to see if the momentum carries the Naz to a breakout.
BC |
