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MARKET WRAP UP 08/26/10
Stocks closed near the lows of the day, as traders braced for more economic data that will be released tomorrow. With the S&P 500 finishing down 0.77% to 1047, yesterday’s lows were not violated. Nonetheless, the level of frustration was as pronounced as I have seen since at least July 1st of this year. The decreasing ranks of bulls are in a state of deep dejection, as each intraday bounce fails miserably. Conversely, the bear team is seeing an influx of new members by the hour, as the late summer selling reinforces itself.
Seeing that I am still convinced that we are in an oscillating market, instead of a trending one, I maintain my belief that now is much more of a buying opportunity for the short term, than a selling one. With poor economic data lining up with lousy technicals and notably weak sentiment, I am comfortable dusting off my contrarian hat and putting it on. As bearish as today seemed, we still held above yesterday’s key lows, as the updated and annotated daily chart of the S&P 500 illustrates below.
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Updating the charts of some important indices and sectors, the trannies finished in the green today. Further, the small cap bulls held right where they needed to.
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Going back to my main point, this is not a case of me being a stubborn bull. Rather, it is more of a situation where I disagree with many traders who have proclaimed that we are in a fresh new trending market. For the past three months, Mr. Market has punished both aggressive bulls at the top of the trading range (1100-1130) and bloodthirsty bears at the bottom of the range (1040-1010).
In my view, the trading range continues.
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[youtube:http://www.youtube.com/watch?v=oOuW9odA9hA 450 300]r
good work here, pro! i do agree with you, we are getting ready to rip some balls off of a few bears!!! 😉
Where are all of the comments? Having that double bottom in the Russell 2000 resolve in the proper direction would make my month.
I saw some numbers today that bulls were at 20% or something but I cannot believe that. Even at the lows bulls are at 50% +! With all the bad news, that things have not broken down (for real) means plenty of bulls, or too many algos, or too many people still on vacation.
I like Huey Lewis, sports album particularly.
Is that a photo of a Mr. Marcus Halberstram?
Wow….you can see the level of frustration and apathy right here on your blog with the lack of comments. In my opinion, it seems too bearish out there…….everyone is talking about a double-dip or the next leg down. I agree with you that today and yesterday were not as discouraging as it was drifting more than dropping. It will be interesting to see what Mr. Unusually Uncertain has to say tomorrow….hopefully he doesn’t have the same effect as last time on the market.
By the way Chess, you consistently find the BEST pictures for your blog posts. Don’t know how u do it but day after day, you continue posting even better ones!
Your blog is the best! Thank you.
I agree totally.
Wow. So many people are bullish again all of a sudden as of 1 hour ago. It’s really kinda funny, isn’t it…
Great post as always Chess.