There were a number of things coming together. The most important was an indicator which I often use as a short term trend reversal, the tic, on the NYSE it reached 1200, since January that is the third time we got such a high reading, that to me indicates a change in market sentiments (bear market easily get to very negative ticks and bull market to positive ones). Short term, it may indicate a retrenchment, but i think we may need two or more such events consecutively, before we first get an immediate retrenchment and second a confirmation that "buying the dips" for the next few months might be, once more a correct strategy. When I saw the premarket futures go to limit negative (about $49 on the Naz), I did my normal premarket deployment of the quintet and few others, the goal was only to get the inversion of the premarket conditions drive (about 70% of the time, the premarket is manipulated in the direction opposite the early days action, they mark the prices up when they want to sell and mark them down when they want to buy), many of the stocks did not even open at their premarket lows, that was strange, on the swoon down, the early morning lows held extremely well, and the trin refused to go back up much, a sign of internal strength. By noon, I started to look at the internals (and particularly the fact that the NYSE a/d was stubbornly keeping up (actually, I think it is a new high since last February in the cumulative series), that persuaded me to deploy the balance of the funds I wanted to deploy (luckily, most of my darling semi equip did not move yet, so that is where I plunged). The fact that the Dow closed at a price not seen since last September's high, is quite significant, it means that some of the postulates of the turnips (that this summer, the Dow will be weaker than the Naz) are wrong and need be corrected.
Will that move be sustained? I don't know, typically an excessive reading on the Tic signal a short term retrenchment, but you need two or three such readings to be meaningful. I have two areas as targets, the 2250 and the 2388 on the Naz, the way we get there will help me determine if this rally continues farther and if the schedule of the next bull move (which originally, I did not have beginning until August) is advanced by 2.5 months or so. Mind you, I have not abandoned the basic thesis that we are going to be in a lengthy period where the indices are "range bound" (I have 6000 to 13500 on the dow and 1400 to 5300 on the naz).
Zeev |
