Today, we climbed another stair, in fact ... we did a bit more than that. If you look at a 30 minute chart of the day, you will see that the first half of the day was identical to yesterday. A big open, then another wedge pattern showing sideways consolidation (forming another step). Then over the last two hours we started climbing quite nicely again.
We hit a wall pennies before the yearly pivot which I expected and then the market meandered underneath that for the last few minutes of the day. Afterhours, we have dropped slightly.
All in all, it was another very healthy day for the market, another step toward repairing investor confidence.
The only cause for concern today was that we saw volume across the board diminish substantially. Usually you want to see volume building as a rally progresses, not the opposite. But, with that said, much of the volume over the past few days was most likely a result of short sellers 'buying' back their shares (at a loss) as the rally took hold. Today on the other hand, I would assume most short sellers have been scared out of their position and are sitting on the side lines waiting for another sign. In fact, I assume most of them sold before the weekend, leaving little to stop today's rally attempt.
My short term prediction, I would not be surprised if tomorrow is a down day, given that we have risen almost 8% in the last 3 days and that we have a very large hurdle (the yearly pivot) to get over. We need a few days of consolidation to build up energy to get over it. But, Im not real concerned at this point about having some downward movement. The market has been acting very well over the past few days just slowly repairing and trying to slowly get back to normal with less volatility.
I bought some more stock today ... still a small amount, but slowly am adding to my position as I see more healing occurring.
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