We ended up with a spectacular rally, but $TRIN is still very low and put/call ratios have moderated greatly. We are right at the point on both the $SPX and $NDX where the market could turn back down or confirm a bottom. Several breadth indicators are giving contradictory advice as that often happens near bottoms... My feeling is that we have a little more work to the downside to go, and the averages will be repelled by the trendlines one more time. Supporting this, is that volume declined sharply as the rally proceeded today, and short term sentiment has reached nearly extreme (euphoric) levels. At best that suggests a pullback tomarrow, but that isn't enough information to confirm or deny that a bottom has formed. I am skeptical, however, as I saw quite a bit of manipulation in the price behaviour today, and breadth was actually rather poor....
One more thing, the $NDX to $SPX ratio is at a relative local high, and that happens more often at local tops then at local bottoms....
2 comments:
THX MARK
My read as well and bought a bunch of SRS and TWM near the close--if not oh well
LAG
Hi Lag,
I'll be curious to see if the PPT can really make this rally stick, my feeling is that it won't be able to, at least until after options expiration, into next week...
Regards,
Mark L.
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