Stocks Find Short Term Bottom; Stock Market Needs More Accumulation and Pretty Charts
September 17, 2008
The Wall Street frenzy continues, as the market sorted out Monday’s trade stocks opened well below their lows while volume raced higher. Fear readings spiked, VIX and VXN both revealed some fear while the put/call was well below Monday’s highs. Not the typical fear readings you get in a bottom, but nonetheless shorts began to cover kick starting buying action. Many stocks were at extreme oversold levels and the buying action helped relieve that pressure and with the entire street negative on stocks we almost certain to move higher. We certainly saw a short-term bottom during Tuesday’s market action its whether or not we can sustain the accumulation and follow through. Tuesday’s stock market action was positive, but looking at the forest for its trees it is still shaky.
New lows clobbered new highs as new lows hit 1800+ and new highs squeaking out 50+. With that many New Lows in the market it is telling me that majority of the stocks are very weak at best. Weakness is not something I want to be a buyer of, I want strength in my stocks. Strength is what will get you to return 1000% or more in a stock.
More than likely the NASDAQ will want to reclaim the 2300 area. I will be looking for massive accumulation and more importantly a follow through day. Without accumulation the market is signalling that the big institutions are not stepping up in this market. We need the big money to flood the market supporting higher and higher prices. I am not willing to put my capital at risk until the large instituions are backing this market.
Cash continues to be king, far too many are trying to find action in this market. Most will burn and churn their account, some may end up flat, and very few will end up making gains. Odds are simply not in your favor at the moment, if you need action trade emini futures or play online poker. Stocks are not flashing high odd trades and should be avoided. Cash is king and be ready for the next bull market!
Enjoy
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Stocks Find Short Term Bottom; Stock Market Needs More Accumulation and Pretty Charts
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