After their impressive comeback in the last few minutes of trading on Friday, the table was all set up for bulls to bounce back today. I, like I believe many others, thought we would start off strong today before the bears would fade any gap and eventually prevail. Well, I got the second part of that right dear readers, didn't I? All the bulls had to do was show up. But Alas! As you and me now know very well dear readers, blessed as we are with excellent hindsight, that the bulls forgot to turn up today. The bears waited patiently for them for most of the day, like good hosts should do (for surely, bears own the house now), but eventually decided to carry on with their party without the bulls.
Let's have a look at how the S&P chart looks after today. The February lows remain an obvious area of support and one can also expect some support at 1160 levels.
But despite the bears' obvious domination, I would still not recommend going short here dear readers. And here is why. Both NYSE and NASDAQ McClellan Oscillators, indicators which I have found very reliable in calling tops and bottoms in the past, are at extremely oversold levels here.
Does that mean a bounce will happen tomorrow? No! Not at all dear readers. An oversold market can easily become more oversold. All it means that the odds are in favor of a bounce here. The market always work in probabilities dear readers, never in certainties. And so does life. But I am sure you already know that. I think we will see higher lows being made in both these oscillators.
As for individual stocks, Gold made a very nice move up today and the intraday action was very encouraging. NGD is my usual gold play. And like I wrote earlier, I got into DLTR today, which showed excellent action for most of the day, before giving in to the market action close to the end. Also, I would recommend keeping an eye on PAL here. This is a gut call here coming from watching the action on tape today. The chart is ugly but I think something might be brewing here.
And that's all from me for today dear readers. Take care and good luck!