Saturday, December 13, 2008

Picture of US market turning bullish

Shows the markets change in tone in the last 3 weeks.
  • First week (21st-28th Nov): market is still in correction. We have clear price/vol divergence. 5 days in a row!
  • Second week (1st-5th Dec): collapse on Monday, follow thru day on Tues. Rest of the week has up days on higher vol and down days on lower vol. Friday's employment report was shocking, but the market ignored it. This 'ignoring bad news' has switched me to bullish.
  • Third week (8th-12th Dec): One distribution day on Thurs, not enough to derail the rally (The volume from Yahoo seems to be wrong - IBD registered it as having +4% higher vol than the previous day). For the second and third weeks, all the other days were up days on higher vol and down days on lower vol.
We await:
  • Continuation of up days on higher vol and down days on lower vol. No more distrrinution days.
  • How does the market react to bad news?
  • Need to see Dow break thru 50MA:
I think theres a 60-70% change this is the start of a tradeable rally. Excpecting a 20-30% bear market rally - use trailing stop loss. Cut loss if it fails in the first place.

1 comment:

IGLESIA DE DIOS JESÚS ES EL CAMINO said...

hello, mis mejores deseos para tí... God Bless you.