It may be, but when they gap open stocks on a rise overnight in the futures on ultra thin volume makes it a tad suspect. I am more inclined to think its liquidation of longs and rolling into short positions. All week the futures were up big overnight on thin thin volume, cash market opens and pop! then a slight rise, and then drift lower all day. That seems like liquidation, not accumulation. accumulation would be a gap lower in the morning and a slow steady rise all day, rinse and repeat. Bet the market holds todays gains, why? because everyone thinks it will fall like it has all week.
i agree that we need another week of follow-through to establish a trend, but i've been trying to tweak my signals to move from detecting "we're in the middle of a trend" to "we've just started". if the market is a dog then options and futures are the nose.
i agree - i've seen that move before and personally think it's one element of market manipulation - but that's not what we had today. when there is a gap on light volume and there is heavy index futures action there is a bull trap being set. today, we have intra-day follow-through - this is key and it shows conviction, en mass, for the current trend. IMKO. (in my krazy opinion)
OK, here is a case for the bulls. The last low on the S&P occurred on July 18th. Since that low the bulk of the money has been flowing into the following sectors. Computer based systems 11.34% Personal computers 11.27% Electronic equipment 11.25% Auto Manufacturing 10.13% Drugs 9.8% Foreign banks 9.77% Textiles 9.15% This is not exactly what I would call moving to safety before a crash.
Also not many serious market declines have started from a P/E of 14.7, and an earnings yield of close to 7% And for all the talk of a bear market, the SP dropped 7.5%, well within the paramaters of a correction... Add to that , that the market has been essentially the same price on balance for over a year..allowed the E to catch the P...hardly irrational, in fact cautious. just some observations, more info needed for the bears
Exactly! It's difficult to look for a crash when the S&P is trading at a touch under 15 times earnings . . . Meanwhile the "E" portion has continued to grow. Also of note, the market just finished its best WEEKLY PERFORMANCE since November of 2004. The 1280.38 weekly highs of July 2nd is just a few ticks away. 10-year Treasury yield drops from 5.04 to 4.99 today. The market is "talking" to us. It's just a matter of whether or not you are listening . . .