The fact remains that this is still a bear market, and yes, we will get some strong rallies every now and then. There are times to step aside and lighten up on the bear side and these are "caution" times. I have my break points to let me know if we are entering a period like that, but so far...not yet.
This was panic buying and it was obvious. What was the reason for the rally? A "secret surrender" from Iraq? That idea is laughable. I guess those Iraq guys giving up are going to give my neighbor down the street a job and put food on his table. Well, then I guess it must be the economic data...retail sales at their lowest level and the bottom dropping out with today's release, auto sales down, home sales down, unemployment up, profits at companies are falling.
Nope, those aren't the reasons.
I suspect the Bradley dates are now being widely followed since they have worked well for a while now, but it can and has failed and this would be a good time for it to do so. From yesterday's low, buyers have jumped in en masse and shorts have been covering. The straight shot up makes it obvious. But if everyone jumps in here at what is perceived to be the low, who is going to buy later? A bull market needs a constant supply of buyers and volume to sustain itself.
My bet is that this rally fizzles a lot sooner than most would think. |
