Bears coming out of the woodwork.

Discussion in 'Trading' started by truetraderone, May 16, 2007.

  1. We're showing smaller |absolute| daily highs, with end-of-day dissipation.

    Looks like COMQ and SPX already turned down on the Exp MACD Avg. (Dow's gotta shed gains.) Just wait it out, two more days after May '07 s expire.. we'll get trend reversal confirmation.

    .. JUNE
  2. duard


    From Sentimentrader: (Nice market research stats--have a look-- I have no affiliation)

    Small-caps Take Another Beating on Reversal Day

    05/15/07 5:00 PM EST

    Earlier this afternoon, I went over some stats regarding large intraday reversals in the S&P 500, after it had scored a new yearly high intraday.

    The reversal looks nasty on a chart, but the historical precedents didn't back up that reaction - the S&P was higher a week later 14 out of 17 times.

    I've been trying to tie in the relative weakness in higher-beta stocks, since that has been a theme for the past month and has been gaining steam. So I checked the reversal stats again, this time looking for any time we got the following:

    * A new yearly high in the S&P 500 intraday

    * A gain of at least 0.5% from the previous day's close

    * A reversal to close the day below the prior day's close

    * A loss in the Russell 2000 of at least .75% from the prior day's close

    That study pulled up six precedents from the past 20 years (1/4/96, 4/6/98, 2/24/99, 1/3/00, 12/3/03 and 12/15/03). While short-term weakness was seen in 4 of the 6 cases, none of them preceded a lengthy decline, and in fact the S&P went on to a new high usually within a couple of weeks.

    I've looked at today's reversal a number of ways, expecting to see some kind of bearish bias afterwards. But based on the reversal alone, I can't justify a bearish stance, and that's why we do the testing - it has saved us more than once.
  3. There will be no reversal. The "bears" that who sold off on Tue afternoon were the same players who drove the market higher on Tue morning. Tomorrow (Wed), the same folks will lift it up again. Simply buying low and selling high.
  4. We won't move sideways forever dude, you know that.

    Sure, you can make money intra-day-trading, but the bottom line is that we will trend downwards once 50% or more of the market "sees" the reversal.

    If you want to sell buy the close, and sell the open, be my guess. but if we close down for the day- we close down for the day. period.
  5. They are looking for the missing honey bees...

    We still have not hit the top.

  6. Its called a pause

    The nasdaq will rebound and the dow and sp00z will continue to go higher.

    A very bad time to go short.
  7. By the time we are really going for a fall the bears will be too scared to go short all the way because they have been burnt a dozen times by then.