Friday, February 01, 2008

The S&P map

Thursday's rally may hurt bulls more in the short term because of the rapid nature of the advance, even though both 20-day MAs and August lows were breached on a closing basis. Bears will see any correction as a vindication of their position, but bulls will have room to work support at Fibonacci retracements and / or January lows, depending on the complexity of the next downward leg.

Last Friday I mapped a possible route for the S&P; the early form was relatively easy to predict, more difficult will be what happens from here.

There is still a great deal of skepticism out in the broader media world thingy, but it is the kind of doubt which would suit the contrarian.

Datawink (sidenote: his chart pattern recognition tool is nifty, check it out and bookmark - it is a beauty) sees trouble in the Dow components.

Bill over at VIX and More is sounding more optimistic for a bottom.

Stockbee points to weakness in breakout stocks and views recent volatility as typical of that bear markets; suggests Fed action should be positive in the long run, but this may mean a long sideways run in the market.

Hingefire fears another asset bubble.

Headline Charts sees stability in the New Lows, which is a positive for the market.

TradersNarrative also sees the spike in New Lows as a positive.

AC Investor is more outwardly bullish, even as technicals say 'Bear'.

Brett has a wealth of articles on his TraderFeed blog (it's hard to keep up!), his use of Financials as a measure of short term sentiment and his Technical Strength measure are good reads for the current market. Average stock strength was 'neutral', but that previous weak sectors like Financials and Consumer Discretinaries had improved considerably.

Quantifiable Edge has a host of good articles; particularly those on IBD follow through days.

TraderMike noted the break of August lows in the S&P, and the significant break in the Banking Index. Has concerns Google will dampen a similar move for the Nasdaq.