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Top of the range or breakout?
Yesterday we saw the opposite action of Tuesday - a very negative day turned not-so-bad after a late rally. But the shortest term indicators are back into oversold territory. This is where a strong market would rally and a tough market might not.
Chart provided courtesy of www.decisionpoint.com
The problem with trying to trade this market in the short term is that you want to buy dips if we are still going to chop. But dips that don't bounce can get ugly. The recent trend says buy the dips. But if we are going to finally see that pullback that will send the longer term indicators back to oversold, the market should continue to move down until it gets to the point of panic selling.
We may be far from that since we have not seen any sign that buying the dips (Have we actually had any dips in the past two months?) ... will not work. That is unless you believe the longer term indicators I have been talking about; The 10-day ARMs index, the McClellan Oscillator, the overbought/oversold indicator, the sentiment surveys, put/call ratios, Rydex asset ratios, etc., etc.
The next Fed meeting is scheduled for next week, Tuesday 12/13. The action leading up to the meeting could get quiet as there really is no other major catalyst for the market at the moment. During and after the meeting is another story. Things could get volatile again. The Fed is likely to raise rates again Tuesday but as always, it's not so much what they do, but what is said about the future economy and future bias toward rates, that may give a hint to what happens next for the market.
No sense speculating anymore. Let's see what the market has got. Will it bounce off the short term oversold reading or are we seeing a shift from the recent rally? We'll know soon enough.
I was impressed with the action in bonds on Tuesday, and Wednesday saw a small pullback. It may be getting time to make a move even though most bond indicators are quite bearish. If I jump into the bond fund it would be an anticipatory move rather than a reactionary one.
Chart provided courtesy of www.decisionpoint.com
The nice thing about getting into bonds now based on a possible change in trend is that it wouldn't take much downside to tell us we were wrong. A move back to 111 would signal us to bail again.
That's all for today. Currently 100% G fund. Thanks for reading.
Yesterday we saw the opposite action of Tuesday - a very negative day turned not-so-bad after a late rally. But the shortest term indicators are back into oversold territory. This is where a strong market would rally and a tough market might not.
Chart provided courtesy of www.decisionpoint.com
The problem with trying to trade this market in the short term is that you want to buy dips if we are still going to chop. But dips that don't bounce can get ugly. The recent trend says buy the dips. But if we are going to finally see that pullback that will send the longer term indicators back to oversold, the market should continue to move down until it gets to the point of panic selling.
We may be far from that since we have not seen any sign that buying the dips (Have we actually had any dips in the past two months?) ... will not work. That is unless you believe the longer term indicators I have been talking about; The 10-day ARMs index, the McClellan Oscillator, the overbought/oversold indicator, the sentiment surveys, put/call ratios, Rydex asset ratios, etc., etc.
The next Fed meeting is scheduled for next week, Tuesday 12/13. The action leading up to the meeting could get quiet as there really is no other major catalyst for the market at the moment. During and after the meeting is another story. Things could get volatile again. The Fed is likely to raise rates again Tuesday but as always, it's not so much what they do, but what is said about the future economy and future bias toward rates, that may give a hint to what happens next for the market.
No sense speculating anymore. Let's see what the market has got. Will it bounce off the short term oversold reading or are we seeing a shift from the recent rally? We'll know soon enough.
I was impressed with the action in bonds on Tuesday, and Wednesday saw a small pullback. It may be getting time to make a move even though most bond indicators are quite bearish. If I jump into the bond fund it would be an anticipatory move rather than a reactionary one.
Chart provided courtesy of www.decisionpoint.com
The nice thing about getting into bonds now based on a possible change in trend is that it wouldn't take much downside to tell us we were wrong. A move back to 111 would signal us to bail again.
That's all for today. Currently 100% G fund. Thanks for reading.
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