I agree, that is a correct statement. I said this in another Forum too. We need more confirmation to get a good continuation and one is EUR. it needs to stay below 1.5 and ES needs to stay below 1076.... otherwise this will be another dip they will look to buy it.. specially if they smell the sleeping stop orders above here..
I don't know if a top is in quite yet. After seeing AMZN and MSFT explode upward, I feel like it's got a little more upward room. I could be wrong, in fact, I might be the best indicator, do the opposite of what I think. But I'm a long term bear and suddenly I find myself more bullish.
In April and July, earnings season was a catalyst to catapult the market to new highs. Expectations were low, and they were soundly beat. Stocks went higher on the news. Well, the expectations were low this time as well, and most bellwethers beat the numbers. But stocks have not gone up on the news. Since INTC earnings, the market has gone nowhere. The bulls were ready for a good earnings season and had already bought ahead of it. Only the fools were left to buy on the news. The cat is out of the bag. Sure, overall market sentiment is still skeptical about this 7 month rally, but actions speak louder than words. People are still complacent as seen by the put call ratios over the past couple weeks. And I don't know too many diehard bears left standing after a 60% up move in 7 months. Those that are left standing are reluctant to short. The bears still need to be nimble here because the trend is still clearly up in the intermediate term. But now its more of a two sided game, no longer is it going to be straight up moves. http://marketcynic.blogspot.com/
There is a little problem that I think some ET folks are having and that is that they see the market going up in nominal terms and they --quite understandably-- are having a problem accepting that fact considering the state of the U.S. economy. I think if those folks will take a step back and look at the correlation between the dollar and the market they won't be quite so bothered and will be more willing to accept the market going up. Perhaps that will help keep them out of trouble as they seem to have a penchant for wanting to short too soon. Today by the way, wasn't there a little rally in the dollar? The market was correspondingly weak. (Of course the correlation isn't perfection, but keep an eye on the dollar for a clue to when the market may be ready to start retreating for real.) Remember a weakening currency is, in general, going to drive the market higher. Inflation, or the anticipation of it, is a very important driver behind the market, and ultimately inflation drives company earnings (in nominal terms of course).
Sub, I know what you mean, and I think when we "shortologists" (as AMT terms us) start feeling bullish, we are very close to a trend reversal. Today I only traded in my sim account, because I'm still not fully comfortable trading ES live and also was giving CL another go at it in sim (I'm VERY new to that beast). My plan was to let the "trend be my friend" and was actually looking to the long side, and I am normally a counter-trend trader with a major short bias. When ES sold off rapidly on a weak failed attempt to test the high after the housing number, I suddenly realized that the smart money was selling into strength and I quickly got my groove on and let the new trend be my friend and it was my old best friend, the bear. We're in a range now, but a strong breakout to the upside no longer seems as likely as it did just a week ago.
It is obvious that the up-trend is losing some momentum. But we don't have a down market-- not yet anyway. It is still up as of this moment. Marketcynic has some wise words.
Ok so where's the dollar going to bottom. What price? You explained something I already know....I'm willing to accept it's going to last. Now here's your task. Tell me when and where that POS bottoms out.
Yeah when's the dollar bottom. Should I ask him? Maybe his words weren't wise enough because I still have a few unanswered questions (most of which you kindly brought up). On a side note CAL, EAT, DRI, ABCW, MI seem like good catalysts for something.