Wednesday, December 7, 2011

sometimes i kick myself

If you saw in my previous intraday comment, I watched as price fell to the centerline and bounced aggressively from there.  Unfortunately I did not act on the reaction and spent the rest of the day watching price rocket up.  In fact, from this bottom to the close ... the Russell 2000 gained 2.6%, even though for the day it closed down 0.20%.  An amazing move.

Today was a very strong move, where all indexes fell pretty hard in the morning hours and then spent the rest of the day climbing.  This sends a loud signal that the buyers stepped in and did not want the price to fall any lower.

I think there were a lot of traders sitting on the sidelines over the past week waiting for a good pullback to be able to get in at a cheaper price and today offered that.

Volume was very strong today, which further confirms the bullish move.

Today was in fact the first day in roughly a week where I felt good about the next few weeks ... we might go up from here after all.  I would like to see a gap open to push me over to the bullish side.

My end of day analysis is still mixed, although leaning more toward the bullish side than previous.

A few things that bother me ...

I have a proprietary indicator which I have coined the "fear index" that is VERY accurate at predicting future movement usually 1 - 3 days in advance and it is not confirming the bullish movement.  In fact, it pushed lower today while prices pushed higher ... definitely troubling to me.

The vix again closed up today ... which usually coincides with a falling market.  What this is telling me is that in the options markets traders are preparing for a down move even though one has not appeared.  These traders could be wrong, but this anomaly usually doesn't occur.

The Russell and Nasdaq had a strong move, but were not able to make a new high today.  So although we did not have damage, we did not technically make progress.  The SP-500 did make a new high, but all indexes ideally need to confirm the move.

An opening gap tomorrow OR strong move intraday should remove my concerns ... but otherwise we stay firmly entrenched in our trading range making little progress over the past month.

No comments:

Post a Comment