MEDIC!!
Momma said
there would be days like this. Everyone on CNBC is stating that
their “indicators
have turned bullish.” No kidding. What a coincidence when you
are defending the bullish side when the market is staging one of the
fiercest bear market
rallies ever. In addition, we are hearing other market timers
and strategists tell us that we need to favor the long side here because,
historically, the market and economy tend to bottom at or near the
time of the third FOMC
rate cut. Hmm…interesting. In addition, we are told
that the market “looks ahead” rather than behind. Fascinatingly, the
VP/Treasurer of Sun
Microsystems, George Reyes, today stated that visibility
is extremely limited, literally “week-to-week.”
So, as the market has suddenly adopted
a “let’s party like it’s 1999” posture this
week, it is ignoring statements like the one cited above from the VP
of SUNW and, instead, we
are being urged to buy now or forever hold our peace.
Astonishing.
From a technical
perspective, I was completely befuddled by the market’s inability
to pullback today. It was clear that the program traders and the window
dressers had an agenda and they certainly weren’t worried about looking
blatantly obvious in the manner in which they carried it out. Regardless,
we are traders and traders are supposed to react to changing market
conditions.
I do believe we have seen
capitulation…capitulation by the shorts today, not
by the longs last Thursday. If we are meant to believe that we saw
capitulation last
Thursday, that implies that we are supposed to believe that the
“bear market” (as CNBC defines it as a 20% drop) we observed intraday
on the Dow
and S&P is officially over. Sorry, I’m not buying it. A bear market
is a process, not an
event. I don’t have a lot of answers tonight as I am hurting
from the fact that I began scaling into short positions yesterday, but
what I do know is that the
bear isn’t over yet…not by a long shot.
The Dow has retraced nearly 50% of its
drop from March 08, 2001. Judging by the
extreme negative TIKI readings today, we observed a significant amount of
program selling into this
strength. Get ready to trade an impending reversal lower.
The Nasdaq continues to languish.
Although it has moved somewhat impressively off
its intraday lows recorded last Thursday, it has a tremendous amount of
resistance above. In
addition, stocks like
(
CSCO |
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PowerRating),
(
SUNW |
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PowerRating),
(
JNPR |
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News |
PowerRating),
(
ORCL |
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PowerRating), and
(
JDSU |
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PowerRating) are
going absolutely nowhere.
Goran