Finally. Wow how hard is it to turn one of these motherships around? This thread dated to the day the anchor in the mud but the big swing around has been painful if not a bit profitable ... Now the extension day and the dow has clearly broken a wedge pattern upwards... now, finally, we can stop barking about how much further we have to fall and we can start asking on how far up we can bounce?
Are we still in an overall downtrend? Every right minded technical minded investor helper place that I run into seems to think so... I'm playing it different. This is a market of extremes and the extreme reaction to the housing situation
stabilizing and getting better could overwhelm any technical erosion. Of course that's asking a lot from this housing market, but hey I'm buying one friday!
The Advance / Decline line on the New York Stock Exchange Index (NYA) is just where it was in mid-November and the Dow Jones Transports (DJT) is also really hanging in there and up 17% off the lows put in on 1/22/2008.
The "smart money" NYSE specialists have just reversed field and for the last reporting week of 2/8 where they reduced their net short positions by 45%.
The trend remains down until proven otherwise. But could all the fiscal stimulus now overwhelm these charts?
Last Friday the McClellan Oscillator was a plus 5 after Thursday's minus 31. Wednesday's McC was a plus 52, Tuesday's a plus 11. So we remain neutral says the McClellan. That could mean that there is a lot of "room" for the market to move in either direction before any big snap back move fires. McClellen lore suggests that we will not be out of the woods, until we get deeper and uglier reads of minus 200 to 300 to set the stage for a rebound that will stick.
Friday's CBOE Total Exchange Put / Call Ratio posted 1.15, Thursday's a 0.96, Wednesday's ratio was a 0.86. Tuesday's was a 1.01. Put / Call ratios are back at the high numbers suggesting that the bounce off the lows and subsequent retracement have increased the fear complex.
Sigma diving has put the fear in me! But I continue to see some possibilities.... JRJC caught my eye, what do you make of a Chinese stock that's flat when their market is down 4%... We have a real problem in my house, my idea pad has been misplaced by most likely my wife... my filtering process is one of repeated re entering prices and vol on up and down days for particular stocks, all that information is floating somewhere else.... I think I remember Hanson Natural was on it... And of course Leapfrog, COIN and alas SIGM but what else was I following? damn. Now's when the short term memory thing is a bummer!
~stoney
~stoney