Today is july 10th. I had earlier said we will know how oil does by July 10th. And we do know, oil has dropped about $5, but the market is still under stress. But today's action was encouraging for the bulls. Ofcourse, calling bottoms in bear markets is an atrociouly difficult situation. We will try and present a case for the bulls here. First we will cover psychology and then some technicals as evidence.
1. Today's volume was huge. To the casual eye, it may seem we had a small upday in the markets. But it was one of the most interesting days to me, as a learning experience. The market was battered down with heaps of bad news. It was hit with Fannie Mae, Freddie Mac, Lehman Brothers, you name it and still the bulls managed to win today on strong volume.
2. As if that was not sufficient, the bears used another potent, now well-tested weapon of theirs. Oil suddenly spiked up 5$. But the bulls still won.
So, the two time tested weapons for the bears seem to be impotent today. Is this the start of something new?
1. Above is a 10 day, 10 min chart of the XLF. Believe it or not, despite the heavy selling in financials today, we see bullish divergence or signs of accumulations in the charts.
2. We see a "dirty" inv Head n Shoulders in the QQQQ. This may be our illusion in sticking to our guns. But we have similar bullish divergences on the Qs too.
The value of this rant, whether worthless will be known tomorrow. Nevertheless, we love these inflection points as learning experiences. As of now, we are a shy bull.
No comments:
Post a Comment