after fighting the tape all week.
- First and foremost my market timing indicator has issued a buy signal today. Now the last two times this has occurred in the past few months it was quickly rejected after a few days of bullish tape. This could very well happen this time around, but I suspect that this 3rd time we’ll get a meaningful rally. So far we’ve rallied 17% off the lows in 4 days which is quite impressive since I fought it all the way, however the average bear market rally during the 1929-1932 is 33% . I would suspect some pullback here, and then a continuation of the move up to sucker as many people in as possible before the next down move.
- Oil continues to fall and the longer it stays down the better for the consumer. It had a big volume rally today and maybe this is the start of a move up for oil, but so far every rally has been sold and I don’t see any reason to think otherwise right now.
- Expectations for this market are so low that the economic numbers are going to have to be cataclysmic to get a severe reaction out of investors.
- Seasonality is bullish right now and everybody is commenting on the low volume rally, but if you look at the volume on the Dow it’s actually high when you compare it to some of the volume from days we sold off the week prior. The fact that we’ve been having above average volume on a holiday shortened week indicates some buying interest in this market.
- Everybody is calling this a bear market rally so it’s probably going to fulfill that prophesy. The real question is how high is this rally going to take us.
- The Vix looks like it’s heading back down towards it’s 200 moving average around 31, which is a level that used to be considered high volatility. I really don’t know where this indicator is going to end up, but it will probably be a few dozen points lower than were it closed today.