>> Nice rally today.
Looks like end of month markup.
Bought a few Q calls yesterday, and feel their will be a few rallies into the 40s before it turns over.
Ever read Helene Meisler on the TheStreet.com? From her column today:
thestreet.com
Why do the bears think the market must drop immediately just because they believe it will? It rarely happens that way. I can't say for sure why, but I do believe that human nature is to want to buy stocks, not sell them. Tops and therefore declines take longer to come to fruition than bottoms, which are often made in a day.
For this reason, let's review what took place after the spring lows and high. The market made a high May 22, after having bottomed two months earlier on March 23. (Well, at least the Dow Jones Industrial Average bottomed that day; the Nasdaq and the S&P had successful tests April 4.) That rally essentially lasted two months. This one's a bit longer, but the rally's length and magnitude won't be exact. It's the process that's important.
In May, we had a quick downdraft off the highs for about a week, followed by a renewed rise that failed to make a new high. Just as I prefer markets to make new lows while stocks hold so that we might get positive divergences at bottoms, I prefer markets to make new highs while stocks fail so that we can call it a top. It doesn't always work that way, and it didn't in June.
Look at the Nasdaq's chart from the spring highs, and see how we kept correcting and rallying. (This is much easier to see if you put your hand over the right side of the chart and avoid looking at the eventual decline.) That is, how we kept correcting and rallying until late July, two months after the high, before many folks thought we'd held at previous lows and were therefore done with the correction and ready to fly higher.
Obviously, that viewpoint turned out to be incorrect, but more important, the decline didn't begin in earnest until Aug. 3, 10 weeks after the high. It took that long for the bears to feel vindicated.
Today's market isn't that different. We've rallied a huge percentage, and the advance/decline line has managed huge gains. Fundamentals appeared to be improving, and folks thought we had seen the lows.
In today's market, we reached a peak overbought reading weeks ago. Ever since then, we have come close to breaking through on the upside, but we have failed each time, despite the push higher in the averages.
Also, the number of new highs hasn't exactly been impressive. It's shown expansion on the Nasdaq, but it's still below the readings of this summer, when the Nasdaq was in the same area.
So the "internal" peak was made quite a while ago. Back in the spring, the internal peak was made May 2.
Right now, the S&P is sitting right on its uptrend line from the September lows, and its current levels also represent some support from the decline two weeks ago and from last week. Can we hold in here? Yes. But as I said recently about the Philadelphia Stock Exchange Semiconductor Index, or SOX, holding support is not key in here; it's the subsequent rally. This market has trouble gaining upside momentum, so I believe the subsequent rallies will fail.
Speaking of the SOX, it did hold, and on the big semiconductor rally earlier this week, it failed. It also failed to make a new high while the Nasdaq was making a new high. A break of that uptrend line would confirm the failure, so it hasn't "officially" failed yet, but I suspect it will.
I don't expect this market to turn on a dime. Markets rarely do. They take time to roll over. With the end of the month approaching, rallies are possible, even probable. But the process of topping has begun, as rallies are no longer putting much distance between themselves and support, making selloffs require less magnitude to get to the eventual breakdown.
>> Age of Empires... My son used to play that game a lot
I could get twice as much done if i broke all my game CD. |
