Short-Term Bottom? Maybe, But Here’s The Rest Of The Story…
When IÂ arrived home this
weekend, I opened my
email box and saw I received over 25 emails asking about the 80-point pop at
the close on Friday. This occurred just as the market felt like it was heading
over a cliff again.
The answer is…I DON’T KNOW! The volatility of
just the past few days has been amazing. I don’t need to go over what happened
again, just to say, welcome to the great roller coaster ride.
Shorter-term, maybe some good news. I have learned
that whenever you see such volatility, it is a sign of a near-term top or
bottom. Since we are already down nicely, maybe, just maybe, the market can
get a near-term low out of this.
BUT…that is the shorter-term. There are plenty
of shorter-term “things” that say a bounce is going to occur. I have tried to
get you to put much more emphasis on what is more important…and that is the
overall deterioration in the technicals. So, bounces aside, a near-term low
aside, please keep in mind that the charts of just about every sector, every
index and just about all world markets looked to have topped.
I do believe it is now important to go back to
what IÂ told you in just about every report in the last bear phase. “Bear
market rallies are sharp. They are quick. They get people talking about them.
They feel good. They suck you in…and they bury you soon after.” I don’t know
what the 200-point day meant but it sure felt suspicious to me. Volume was
light and I was hearing a little too much of the word “bottom”…because of
one day…and yes, it is not a bear market until a major index drops
20%…right?
Finally, short-term aside, if the market decides
to break last week’s lows (which I doubt will happen near term), expect another
vicious sell-off to occur as the market is not playing games with breakdowns
right now.
Gary Kaltbaum