On all of the daily charts we have an inside day -- a day when the highs and lows are inside the previous days highs and lows. This is like a mini-triangle pattern.
Today was extremely volatile. Anytime there is a change in sentiment of the degree we saw today you have to wonder what is going on. Instead of there being a more uniform view of the market -- that is, a majority of traders think the market is going firmly in one direction or the other -- today was extremely varied. The bears were in full force until the very end when the bulls took over.
Traders are trying to figure out exactly what is going on. And no one is really sure just yet.
3 comments:
Two points about "smart money".
First, given the high degree of automatic trading going on these days do we even know if there is any such thing as market sentiment anymore? The press needs a reason every evening to explain why the market moved as it did. But, unlike the weatherman, they can't point to a cold front moving in from Canada so they make things up.
Second, if the smart money is so smart why do we get things like this:
"Merrill Lynch cut its ratings on shares of Bank of America Corp. and J.P. Morgan Chase & Co. to neutral from buy, and lowered Wachovia Corp. to sell from neutral."
Wachovia was at $58 earlier in the year and is now about $40, and now they tell people to sell?
We see this kind of closing the barn door after the horse has left advice all the time. No one seems to find it strange. If I could predict at $58 that the stock was going to fall why would I tell you? I'd just sell short and keep my mouth shut.
I'm always amazed that anyone listens to advice from stock brokers and TV pundits.
"However, at the end of the day there was a high volume buying spree on all of the indexes. This tells us that traders saw some type of bargain at the levels late in the day. It also tells us traders may have thought the selling was overdone"
you sure they are buying not short covering ?
The Plunge Protection Team was hard at work again I see.
Paulsons in China today looking for a bailout, so have to prop up the market until we sell a bunch of Super SIV's to them.
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