Today is Thursday February 11th and the market did in fact have a good size move today. Dow up over 100 pts, S&P +12.
Well, we did see the up move in today’s action. Yesterday I did say that it could go either way and that is obvious, but the odds were that it makes the move up, was the call. We were on a tipping point, one way or another and it leaned up.
We did again have resistance at that 1080 level that was a problem a couple of days ago, well, we are back and knocking on the door. The market is in a good position to make its move right from here. I don’t have my charts up right now, it is Thursday evening and the night trading may anticipate the move and try and get a jump on it. That is just what I remember from todays close, strong and at the high of the days range.
Speaking of ranges, we did come out of that inside day of pressure from yesterday. That is most often the case, when you get squeezed from both ends like yesterday.
I checked the Investor intelligence market survey of newsletter writers with this weeks numbers and yet again, the numbers drop. That makes it 5 weeks in a row and we stand at 34.1% Bullish. That is much better than it was 5 weeks ago. A reading of 35% or less is considered Bullish for the markets and you can expect a move up of some significance. I am a little surprise as I mentioned about this last week where we were at 38.9%. I had said that if the market sells of or stays underwater for a spell, until the survey is again taken on Tuesdays close, it may sway these guys to lose their bullish stand and lean to the bearish camp. Well, it worked and it made the numbers drop, like almost 5%, putting us in the bullish rally camp. Isn’t that something. Well, we didn’t have the big rally yet, but its a start.
Most of these writers are trend followers and by the time they get the feeling that the market is going to drop it already has. They become bearish, tell the world with there 10’s of thousands of newsletters, which sways public opinion to the short side, just at the moment the market decides to put the short squeeze on all the bears and make them run for cover. Happens every time.
That is how it works out in theory, but in reality, I have seen that happen as many times as I have had birthdays, that would be 47. Is this time any different? Probably not. I don’t like to base investment decisions on stuff like this, but it is something to consider when you put all of the pieces of the puzzle together.
We should rally enough to drive the excess off of the weak numbers and at least put us somewhere in the middle of the range, that would sentiment here. That should be the case in the S&P as well. With a reading like this, I would say, it is very possible for the market to rally all the way back up. That was not something I was actually looking for right now, but this does bring in the very possibility. The market will tell us, that is 100 % for sure. We just need to wait and see. Anyone with long-term short position, I only say, be careful as we all should.
In todays trading, it was quick and easy. I don’t like using that word. Thats when you can get blind sided. We always have to keep our guard up, drop it, think it is a walk in the park and the market will humble you quick. So, I reluctantly use that word today. I took a few trades, basically only had one market move. I had a touch of indecision but finally got it right. Going from memory, I think it was like this; flat, /-2 ticks, /+2 point, +4.25 pts, +3 points/ -2 tick small size,(1).
I have a video of it below, but not to sure of the quality. I am trying out new software and not to familiar with it, so bear with me on that.
That is it for now, still under the weather, but hope to be better soon. Thanks for tuning in.
Good Trading !
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Tags: market sentiment, stock newsletter writers, stock newsletters, trading questions
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