Just a quick follow up to yesterday’s events (blog here).
Today did see buying come in, but as shown on the Google chart above, and on the market stats links that follow, there was an intaday reversal. Notice how GOOG peaked around $425 and closed around $400. See the shape of that candle? Gap up open, rally to new high, then close back down near the open? That’s a warning.
Updated charts of the securities I showed yesterday are displayed below.
(look at that low volume on the bounce)
And here are today’s market stats: summary, volume leaders, gainers, losers. The stats also show the back off exhibited by GOOG. The rebound was nowhere near as strong as the selling. Note the up/down volume and advance/decline. Also the new highs/lows.
Still, today counts as day one of a rally attempt. Based on the extreme move, the extreme negative sentiment (collapsing banks, failed vote, m0re), and some other factors, there is a pretty good chance that a meaningful and sustainable rally develops. That said, I think it is less likely that this is the start of a new bull market. Instead, if I had to guess, I’d say this bear market may have a final capitulation to go through, one that sucks in the retail investor, which I don’t get a sense was fully sucked into this one.
PS: I bought a little GOOG below $400 yesterday and sold it above $400 today, but didn’t catch near yesterday’s lows or today’s highs. Was quite busy and also out for some hours both days. Bottom line: scalped a little and that’s good with me.