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MARKETS:
NASDAQ: Biggest volume yesterday since April 17th and 18th, with about
50% more shares traded than the the 4 week average. It can be inferred
that some cash was put to work by the previously striking buyers, while
sellers happily met demand at slightly improved prices for them. Is is
it over? No way to know really, but since most participants were
eyeballing a 50% drop from the highs before stepping in, chances are we
will do less, or more. Given the amount of humility and pessimism in the
marketplace after the break of the April lows, one has to beware of
upside surprises. Knowing that one cannot catch bottoms other than by
chance, long term investors may be tempted to get a small bite at
current levels.
OUTLOOK: However I wouldn't expect a rapid rise either, nobody will
chase prices here, the online traders are KO (equity levels down up to
65% at some brokerages) and strong hands have no interest in pushing it.
Hence, in a positive scenario, one could expect an erratic stabilisation
around current levels, with a slowly rising trend and medium volume over
the next months. Alternatively, we may continue this pattern of sharp
breaks and surprising retracements, until one day we realize we are no
longer making new lows. Markets tend to confuse the most possible
people, this time will be no different. Again, for the bull trend to
resume, we need a dead bear corpse which no longer reacts to bad news,
even rises slightly on low volume such occasions.
QUOTE OF THE DAY:
It is only after dawn that one knows the darkness is over...
(follow up on yesterday...)
Best to all
Gwenn
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