Stocks undercut their October lows and it looked like the bottom had fallen out.
Yet in the early afternoon things suddenly turned around. Off the races! Was it short covering? A rebound after running stops?
Look at this screen capture from MarketWatch.com from this morning's newsletter. You'll prbably have to click it to read the little headlines.
I did not circle everything as I did in the newsletter but if you have a moment and some strong reading glasses peruse the entire page. Every single bit of news was bad except for the headline. Everything. OMG, the end of civilization as we know it.
And then the Dow rallies 900 points.
When everybody is on one side of the boat, go to the other side. It is a lot drier and you can see better, too.
6 comments:
But how do you read what happened today? Down big; recovery; then down big again?
As I remember the big bear market lows of the past nobody was looking for a bottom. The feeling was more like disgust for equities. But we had alternatives too. AT&T 20 year debt in '82 had a 20% yield to maturity.
I also find it worrisome that so many are turning bullish against this reality:
S&P 500 down 6.2% this week, down 3.9% the week before.
Maybe being a mutual fund investor keeps my head out of the clouds ; )
Just my 2 cents, nothing more.
Dave,
Clearly the afternoon selloff after the midday recovery was not helpful. But 5 up and 3 down sounds rather Fibo (fibonacci) to me and within the limits of a correction. If it gets worse Monday then I'll have to eat some crow.
paul,
I differentiate between the end of bear markets and the beginning of bulls. The latter are born out of apathy and/or disgust. The former ends on washouts and turbulence.
People will give up looking for a buy point (you can call it a bottom if you like) as the trading range chews them up.
I have seen an Elliott Wave interpretation that Oct-Nov is a ending diagonal and that means one or two lower lows but not by much. Probably just enough to scare people away.
Michael,
Thanks for the clarification. I'm really just looking for an intermediate term rally.
I thought readers might be interested to learn that Carl Swenlin has reiterated his opinion that this Oct-Nov price action is a continuation pattern leading to lower levels.
http://www.decisionpoint.com/ChartSpotliteFiles/081114_rr.html
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