Stock Market Rebounds, but Volume is Light
October 1, 2008
Stocks rebounded from Black Monday but it smelled more like short covering than real buying. From the start stocks staged a rally that continued throughout the day. The buying was no frenzy and appeared to be tame for much of the day. Some late day buying showed up but overall was a tame day for buyers. At some point we’ll need to test the lows but for now the market will be waiting to see if a new bill comes out of Washington.
It is absolutely pointless to try to pick a bottom here. VIX hit up over 48 as we hit our lows, but I still see former leaders that need to come in more to really start feeling like we’ve seen a bottom. In addition, New Highs were almost half as much as Monday’s level. Yes, we had 20 fewer New Highs on Tuesday than we did on Monday. This is a troubling sign as you’d like to see some strength in a move upward.
Monday’s low took the NASDAQ down 30% from its October 31st high. We are in the midst of a terrible downtur or a Bear Market. We know that if a bear lasts more than 6 months it will take at least 2 years to foster a new Bull Market. Even worse, we are seeing terrible charts and very few stocks with growth in fundamentals. The bottom line is we need much more time to work through this tough time and allow stocks to setup properly. It is best not to waste your time and energy for minimal gains. Wait for a new bull market with fresh breakouts from sound bases with stocks that have tremendous growth in their fundamentals.
Enjoy
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Stock Market Rebounds, but Volume is Light
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