There was no bad news to keep the bulls from capitalizing on yesterday's test of the 8/5 low. Breadth was +76%. The volume was 88% in up stocks which is very good. Another day like that might end the correction.
The futures rebounded nicely, but remain below the 200 SMA. We don't have a green bar on this rally attempt yet. The DI lines still do not have a positive cross. In other words, the bulls still have work to do.
The red barely turned down and remains above 50.
Today's rally is a good start on a turnaround, but there is still work to be done. The bulls need to keep the buying pressure up next week.
I have always thought the NYSE tick indicator held the key to real buying and selling pressure. I tried for nearly two decades to figure it out on and off. However, I just could not get it. I was recently made aware of a way to look at them to get the very information I was after. After studying much history I have determined it works. The ticks can give amazing buy and sell signals. The market can go for months after a buy signal with no sell signals. The signals usually happen very near the high and low of important turning points. There was a buy signal on 6/3 which was a down day and the final low of the pullback. The market rocketed up the next day and kept on going. For the lack of a better term I will call these signals tick buy and sell signals. How creative is that! In our current situation there was a sell signal on 8/1 after the tariff tweet. None of the big rally days (including today) have given me a tick buy signal. There was a fresh sell signal at the low yesterday. That may turn out to be a sign of capitulation after today's bounce, but that remains to be seen. With this setup a buy signal could produce a decent rally. Until that happens we need to be alert as the market could still roll over and make new lows. I will do updates on the days I see a signal.
I really do not understand why the pundits act as if all the negative rates on global bonds is perfectly normal. Not a problem at all. Some people even try to say it is a positive. If negative rates are so good why is the European economy bordering on recession instead of flying high? Here is a more realistic look (at least the way I think) at it. Negative Is The New Subprime
Have a great weekend. Peace.
Bob
No comments:
Post a Comment