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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: russwinter who wrote (42426)	9/27/2005 6:06:58 PM
From: Mr.Creosote	Read Replies (2) \| Respond to of 110194

I really do believe that the market is trading on 100% technicals right now. The active traders are past prices to get buy/sell signals and nothing else. Some people call it "algorithmic" trading. Nobody can explain why the market trades the way it does but let me take a shot at the present situation anyway. The mini rally from last Wednesday could be due to the market having gotten short-term "oversold". What does this mean? Well as I understand it, traders do not sell the market when the RSI gets below 30 or when the lower Bollinger band gets hit. (Both of these events occurred last Wednesday.) Also we broke through the 50 day moving average which is something many traders consider important and more often than not price reverses in the short-term due to the selling vacuum that's created following the break. Basically the market attempts a rally when its short-term oversold and that's what maybe happening. In addition we have the RYDEX traders fully loaded with bear funds which makes the sentiment picture somewhat difficult to interpret (RYDEX traders have often been wrong at market turns). It appears that everybody is waiting for everybody else to make the first move irrespective of what's happening in the world and in the economy. It's like the old west out there.