This market is so sneaky. Just when you think its going higher, it slaps you back. Just when you get the perfect setup to short, and you're counting all the money you'll make, the bulls run away with it. The close on Friday will tell us much.
My gut feel though based on what I'm seeing so far is this pause is just another fakeout. Although we saw reversals in most of the avgs today, in the context of the LONG term trend, we still have a green light. Even the internets that have shown some weakness the past couple of weeks, their long term trends are positive. Granted, we have two more trading days left this week and anything can happen. But I wouldn't be surprised to see a rally begin any day now. Even the transports that appear to be breaking down recently - long term trend positive. Stocks like U that broke down today because of poor reception for their quarter - long term trend positive. Most of the airlines are so cheap relative to the rest of the market. How much lower can they go. The charts still look bullish.
Just about every day I try to post a few more small stocks that are beginning to move. The point being, we are seeing the beginning stages of a big rally in these stocks. The fact that these companies are coming to life after being beaten down for so many years should weigh heavily with anyone's analysis of market direction. Today I add CICI, SEVL, MTRA, VSNR, AXIM, ACLR, POSO to the mix. These companies are in the process of breaking out of multi-year patterns on their charts. They're all at major lows. Most of the stocks that I've pointed out have huge insider activity.
So even on days like today - there were pockets of strength. Across the board. So unless things change dramatically over the next two days the trends are still intact.
Good Trading.
SO |
