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Pastimes : The Philosophical Porch
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To: westpacific who wrote (5852)8/13/2010 8:42:19 AM
From: Rarebird  Read Replies (1) of 26251
 
Transcendental Market Truths:

The Market:

The market's rush to the downside stalled out after the opening on Thursday as the panic selling subsided. I got buys from my breadth indicators and although they're probably a bit early (as usual), they are good at warning shorts to cover while there's a bit of the downtrend still left to provide willing sellers (if one is short, one buys to cover from the sellers who are liquidating long positions).

I would not be marrying a very bearish position here. I'd wait till the 26th-27th of August to begin accumulating short positions. I'm expecting another rally to ideally start this Monday, the 16th of August. This last rally could be a real barnburner of a short covering rally. This decline may be creating the tinder (short positions) for a huge conflagration to the upside in the second half of August.

Dow Industrials:

This selloff has not seen much in the way of negative top-down money flow, which makes it very unlikely that it's a new big leg to the downside as most Bears seem to suggest.

As for that rising wedge, diagonal triangle pattern that I was looking at, it didn't play out the way it should have and I suspect that it was the big money painting the tape to fool the Bears (once again) to get them heavily short. The next step would be to levitate stock prices and turn them into unwilling buyers.
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