Tuesday, July 13, 2010
Rally is Strong
Well the fracturing of the various indices and low volume yesterday was just another pause and recharge before the next leg up in stocks. Today the market surged up with a gap at the open. I was hoping that it would soon reverse and mark a nice spike and reversal which may mark a top for wave (ii). But the market has held up nicely all day, is now pushing higher towards the close (for now), and the internals of the market are very strong although volume still remains a bit light. So the bears appear to be back in their caves sleeping for the summer with a few bulls running around doing what they please.
I'm not fighting the bulls in light summer trading, and if we're in large wave 3s at two degrees of trend, then the market needs to prove it. And it certainly isn't doing it SO FAR. If the market can reverse and decline heavy tomorrow, and preferably reverse with a gap down to create an island reversal pattern, then the bears may still have a chance. But the market needs to move lower quickly to support the proposed wave count. As it stands right now, the entire rally the past two weeks can count as a 5 wave move, suggesting that the larger trend has turned up. So the bulls have certainly gained the advantage here, and the new surge of strong internals gives them the momentum to keep pushing higher in the short/medium term.
The bears definitely have work to do. The close today, and the follow-up action tomorrow will tell us a lot.
UPDATED INTERNALS AFTER THE CLOSE
So the market closed very strong with volume that kissed the 13 day moving average on the NYSE. I see no bearish signs in the market right now, and the bulls definitely gained the upper hand today. That can easily completely reverse tomorrow, but it's gonna have to if the bears want a chance still. I'll discuss tomorrow or Thursday the impact and moves going forward if the rally continues higher and makes it evident that the big wave 3 again remains ellusive.
PLEASE NOTE: THIS IS JUST AN ANALYSIS BLOG AND IN NO WAY GUARANTEES OR IMPLIES ANY PROFIT OR GAIN. THE DATA HERE IS MERELY AN EXPRESSED OPINION. TRADE AT YOUR OWN RISK.