Yesterday the lack of bullish follow through gave the bears a slight win. However, charts are firming up on a weekly basis and this may be the beginning of a base-building process rather than a set up for more downside.
Today we suggest everyone start putting together a list of potential long positions, but keep your powder dry and wait for set ups to gel before jumping headlong into the fray.
Most stocks are trading up off of support levels, so even if prices turn lower today, true breakdowns are unlikely to occur. If we are on the verge of seeing the floor come out from under this market once again there should be time to do research and take only the best risk:reward positions by assessing today or tomorrow's close. There is no good argument that we can see at this time for hurrying back into the market.
Take your time here. Prices are not trending either way and at best you can call this market neutral. Neutrality and overly bearish sentiment seems to favor the bulls at this point. Outlook:
With yesterday's high volume reversal we may have the start of a double bottom, which puts the 50-week average back into play. Volatility is expected to remain extreme and finding gems in the broader market is going to be more a matter of luck than skill. We suggest avoiding everything but those bullish areas that have continued to find a bid throughout this bear market; commodities, ag, and China.
No comments:
Post a Comment