If you look at the charts of just the Nasdaq and S&P, you probably wouldn’t be too worried about the overall market as both continue to ride their nine day EMAs higher. If you look closer, however, you can see some divergences with price and moneystream that is a bit worrisome. If the nine day EMA does break at some point this week (it’s held the ENTIRE YEAR so far for the Nasdaq), I think there is a very good chance of seeing a sharp, quick move lower of 2-4%. Hopefully, the market could right itself from there but it is probably not something you want to sit through if you have a lot of long positions. On the other hand, if you look at the chart of the Russell 2000, you probably would be worried. This chart has been lagging for about a month now, both in not being able to challenge 2011 highs like the Nasdaq and S&P did and also moving sideways while the other two indices ground their way higher. Breath has deteriorated as well over […]
After a massive run-up going into this morning’s job number, the market was certainly set up for a selloff, and when the number came out (which was AWFUL), we certainly got a selloff…sort of. The market started the day with a gap, tried to bounce a bit, but then quickly sold off further. That was about it, however, and around 11:15, a bottom was put in for the day and the market rallied strongly from there, finishing well off of its lows. Although the final numbers will show decent sized losses, in my opinion today was a very impressive showing by the bulls. Remember as well that this was in the face of an AWFUL jobs number… I went into the day short two stocks (SOHU and BEXP) and long only one stock. I was stopped out of both shorts by lunchtime and began to go long again in force as I saw setups I liked all over the place. This may be the wrong play as perhaps the market needs to pullback further from here, but given the action […]
Well, to answer the title of this post, it was pretty, pretty bad. The Buy/Sell Difference measured by 4% breakouts and breakdowns was -1208 today. Yesterday it was -800. The cumulative difference of the past four sessions is -2311. Looking back over my numbers since late 2007, I could find only two other instances of a day of -800 followed by a day over -1000. Those dates were September 15 and 17, 2008, and a stretch from October 2 to October 8 or so in 2008. Since then, we’ve theoretically have not seen as bad a two-day breadth move as we saw the past two sessions. I think it is safe to assume that the bear market that started right around July 27 has now regained its strength. I’ve been saying for a while that I believed we were indeed in a bear market and that the August lows would eventually be broken, but I’m not going to lie and say I didn’t have my doubts about this idea last week as the bulls kept pushing things higher. The market […]