So there is the bounce that the 5,3,3 Sto suggested we would get, though it needn’t necessarily have come on Monday. The last time the 5,3,3 Sto gave a signal that the market was short term oversold, we rallied for 7 sessions before giving it up. Because we have not yet had a climax bottoming event, my personal feeling is that we could now rally for a couple of more days before rolling over and resuming the downtrend, however; the market will determine the direction it wants to go and if it wants to go higher and higher from here then so be it because the market is always right.
Yesterdays mega rally came on some pretty good volume but after such a day one has to expect a pause in the markets today. My definition of a pause day is for the Dow to move somewhere around 50pts, +/-. Today’s action can be somewhat discounted so, IMHO, the next important market day will be Wednesday. For this oversold bounce/short squeeze to be more than just a bounce, then it will have to continue through the rest of the week and do so on good volume with AAPL rising each day without hesitation. And GOOG, too.
Daily chart of $SPX showing how it has climbed back inside the rising price channel, which is good for the bulls. But it’s earnings rodeo time so let’s just see how long $SPX can hang on.
Yesterday the $TRIN closed at 1.15 in an instance of Stealth Distribution. This is just one day and we need at least one more instance right away before this becomes a consideration.
The P/C Ratio closed at .77 yesterday indicating that most market participants are on the same side of the ship, but the market is all about disappointing the expectations of the masses.