THE BOUNCE
The markets have bounce on the open and the market internals are pointing north by north with 2,000 more issues higher than lower. A nice tell may also be the 10 year Bond being back at 5.1% way down from its close yesterday at 5.15 and higher during the day. Maybe the markets have overeacted to the inflation sniff or maybe the markets did not fall on the inflation worries.
Sectors outperforming include Small caps (+1%), retailers and brokers, both up 1%, and GLD also up 1%. The downer is the VIX as it has now plunged 7% making the fear worries a bit less worrisome.
How bout this for a scenario, everyone expects the markets to bounce and then of course every one will want to short into that rally. Maybe we get some good news and the shorts get blown out and we go right back to where we were last Wednesday. Wishful thinking?
posted by DAVID at
10:09 AM
2 Comments:
"Maybe we get some good news and the shorts get blown out and we go right back to where we were last Wednesday."
Wishful thinking? Maybe not. Everyone I know and their brother have a dead cat bounce lasting 2-5 days followed by a resumption do the downside baked in. From a contrarian view point, what you are wishing for could happen. The other possibility - we may not even get a bounce - instead, we just stabilize here and resume to the downside.
Today seems as if it will just wear the bulls out waiting for the big bounce. Until they are fustrated and give up hope of a bounce and sell. Bottom picking isn't supposed to be easy.
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