BigTrends

So, was that THE bottom?  Last week the SPX touched 1010 on July 1, flirted with going lower but the oversold condition was too much to bear, and now we're back to levels last seen in very late June.

But as you may know we don't pick tops/bottoms, rather we ride trends just before they begin to accelerate. The market is moving fast and is filled with fear, hence the elevated levels of volatility.  We have not seen a concentrated effort by the bulls to push this market higher, and while Wednesday was a bull win it was not a landslide, and last look the market was still UNDER the 200 MA and the 50 MA.  Volume has been rather modest, I don't think the bears were seeing a strong move Wed and the buying was likely short-covering (let's not forget, bull markets can start from short-covering).

All in all the market is stuck in a range, some decent short setups are there but it looks to be a bit early as this buying frenzy continues on a bit longer.  The VIX hovers near 25, a recent area of support.

Why this date?  Among other things, a big earnings day...Goldman Sachs in the am, and we may see this as a catalyst for bulls and bears.  Intel in the afternoon, and a smattering of economic reports.

After two lousy closes, and one distribution day the markets on the verge of a rollover.  While it may/may not be swift it seems this rally is long in the tooth.  Monday's rally showed a lack of firepower on volume, and most charts only ended at the top of a recent range.  Could it be the bank offerings have sapped much of the liquidity?  Quite possible.  We look very closely at moving averages, and the 10 MA is about 4 days away from crossing under the 20 MA.  Not a serious issue yet, but we're watching it.  Breadth was solid until the sellers got busy late in the day.  While some would say it was 'just a bout' of selling, the odds seem to favor some more pullback.  The VIX is outta control and flashing high levels of complacency.  A couple of good whacks will get people scratching their heads again wondering...hmm.

 

We were looking at DJIA monthly chart going back 90 years today with simple moving averages to see where we stand. Interesting thing is we have completely broken the 10 yr ma that held as support in 2002/2003 bottom. BUT we are in between the 20 and 30 yr ma, right around the 25 yr ma, around 6600 DJIA. 20 yr is around 5500, 30 year around 7600. The interesting thing to me about that is the Great Bull Market began in 1983 ... so we are about 26 yrs beyond that (it ended in 2000/01 or 2007 most think) ... point is, we are right around where an average uptrending line from 1983 to now would be ... i havent looked at the exponential ma yet. Oh, and the 50 year DJIA ma is around 3,600 if you want to really scare yourself