Coolhand's Market Analysis

Originally Posted by coolhand

The bulls made it 2 in a row on Tuesday. Much of the previous losses have now been erased and price is not far from the peak now. However, there may be resistance as price tries to move higher.




We've seen this before too. Every bout of weakness of some size gets reversed at some point with new highs eventually being hit. Are we going to see fresh highs again? Let's just say I'm not betting against the bulls after today's rally. Momentum is now starting to turn up.



Breadth also got well in a hurry and is back to a more solid bullish reading.

There are many reasons to be cautious right now. Certainly the bears might take back control, but they might not either. We do have resistance above, but we're still in a bull market. I was leaning bearish given the action in certain market segments, which were not typical market activity (gamestop, silver short squeeze, etc.). We also saw the smart money pull back on their bullishness last week, which meant they saw the potential for selling pressure in the short term. Now, we have 2 solid up-days of action, which in the past has meant new highs were eventually hit.

I am moving back to a neutral stance. Monday's rally was simply a bounce off support. Today's follow up rally now calls into question the bearish argument. Can the bulls now push past resistance? Probably. But I can't get bullish just yet. I'd like to see another day or 2 of action (by then we'll have a fresh NAAIM reading).