Yesterday's Stock Market Rally
The market put in quite a performance yesterday. I don't think I have seen so many Wall Street personalities bullish since the top in 2007. Sometimes that's good and sometimes it's not. It's been a while since the market has done anything other than go down so just remember there are times to run with the bulls. As we have said since November, the seeds of a rally are there but they take time to germinate. And, I expected something could germinate in the first quarter of 2009. As the first quarter winds down, we shall see.
As I mentioned a handful of days ago, we are more oversold than at any time since dinosaurs roamed the earth as measured by the deepest decline without a rally of at least 50%. We are also more oversold on an intermediate term since the onset of the Great Depression. On a short term basis we are more oversold than at any time this cycle. Plus, we stopped right at technical support of 660 on the downside. (Actually 666 for any Revelations readers anticipating the end of the world.) Plus, we have two upward gaps in the S&P that were begging to be filled. One was filled yesterday and the other is in the process of being filled today. The massive volume in many ETFs shows this is a trader's market as opposed to long term capital...so far. So, yesterday's rally was very much a technical relief rally that had nothing to do with any news. Citigroup is up 60% in two days. Does anyone believe long term holders are plowing into banks after Citi, as an example fell from the mid $50's to 99 cents? The attributes to this rally being Citigroup CEO Pandit's remarks yesterday are ridiculous. Let's get real. Citigroup is for sale at the 99 cent store and some buffoonish comments by the CEO are driving a 7% rally? The joys of a for-profit press are never ending.
I still do not see a tradable bottom. And, I see absolutely nothing that would tell me the bear market is over. Yesterday's rally was the most constructive in a very long time but since when is investing comprised of the movement of a single day?
As I mentioned a handful of days ago, we are more oversold than at any time since dinosaurs roamed the earth as measured by the deepest decline without a rally of at least 50%. We are also more oversold on an intermediate term since the onset of the Great Depression. On a short term basis we are more oversold than at any time this cycle. Plus, we stopped right at technical support of 660 on the downside. (Actually 666 for any Revelations readers anticipating the end of the world.) Plus, we have two upward gaps in the S&P that were begging to be filled. One was filled yesterday and the other is in the process of being filled today. The massive volume in many ETFs shows this is a trader's market as opposed to long term capital...so far. So, yesterday's rally was very much a technical relief rally that had nothing to do with any news. Citigroup is up 60% in two days. Does anyone believe long term holders are plowing into banks after Citi, as an example fell from the mid $50's to 99 cents? The attributes to this rally being Citigroup CEO Pandit's remarks yesterday are ridiculous. Let's get real. Citigroup is for sale at the 99 cent store and some buffoonish comments by the CEO are driving a 7% rally? The joys of a for-profit press are never ending.
I still do not see a tradable bottom. And, I see absolutely nothing that would tell me the bear market is over. Yesterday's rally was the most constructive in a very long time but since when is investing comprised of the movement of a single day?
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