2009-02-02
Since my last post [ AAPL up 10% AH, can the market rally from here? ], Market did rally to the upside and turned right back down at Dow 8000. Almost two more weeks later, market go back to roughly where it started. So, what gives? One thing market accomplished is to squeeze out all the shorts that piled on around Dow 8000 last time, now that we are back here again. Shorts turn skittish and time is ripe for market build some momentum to the down side. Remember, market always tried to frustrate most participants before it showed the real direction.
If we zoomed a little closer on the short-term basis, market is oversold. So expect some more back and forth in a tug of war between bulls and bears. But the least resistance path is to the downside and it is imminent. Some might want to say the volumn is light in the last two big down days. It might be a bear trap. But as saying goes, market can fall on its own weight, it can fall a long way before volumn swell, when a capitulation bottom form.
The next down leg show carry DOW to low 7000, i.e. below the last Nov low, before another counter trend rally can develop.
All critics and bricks are welcome!! :-)
P.S. Happy birthday to my wife, who is the super cook and mom…
