I think it was Warpfactor who mentioned a couple of months ago how it is psychologically easier to try to catch a falling knife than it is to buy when the market is rallying as it did yesterday. I agree 100%.
Also, if you believed today was simply a consolidation, you would be happy to be able to buy at lower prices than yesterday.
Alas, the psychology doesn't work that way, at least for me it doesn't, after such a long bear market. Today was all worry that the rally wasn't real.
I thought I would post today's updated $CPC:VIX chart.
stockcharts.com[e,a]dhllnyay[de][pb15!b100][vc60][J4304647,Y]&listNum=11
I don't know why it works the way it does, but today was the day I have been waiting for, for the past couple of months. Namely, the 15 dma crossed down over the 100 dma.
The last 2 times it did that before were in March and September 2001. Before that, it crossed in October 2000, which turned out to be bullish for the broader market, albeit bearish for the techs.
If it works again, I will wish I had placed more faith in it and used today's weakness as a major buying opportunity... and if it doesn't, well, it will prove that you can't rely on any one method for predicting turning points in the market. At least I'm not sitting in cash or short. Whatever the outcome, it does give the bullish camp some food for thought... and the bearish one too. |
