Hi Everyone
Yesterday’s late rally suggests a wider retracement for the next few days. Current bear flags may turn into rounded bottoms, and weaker stocks will consolidate further until the next leg down.
If we’re in for a multi-month bear correction, it would be great to have a steep retracement now to test the January highs. Time will tell.
My OVI Index Indicator made a small leg down on the S&P yesterday even though the markets recovered slightly and is still very negative on the Dow and recovering on the NASDAQ. For now that suggests that any retracement will be short-lived.
OVI for S&P (SPY)
OVI for DJ-30 (DIA)
OVI for NASDAQ (QQQQ)
Let’s see what Obama has to say tonight and whether he can make an impact beyond a few days. My gut feeling is that sentiment has turned, but as ever we must only trade what we see, and stick to trading a clean breakout. It’s vital to not let your “opinion” to influence you too much. When AAPL, GOOG and GS all report impressive earnings and the markets don’t react positively immediately, that’s a pretty important sign to me.
All the best
Guy