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Wednesday, November 26, 2008


Could be! Dangerous road to travel on these days calling bottoms but the first one that caught my eye is the Dow Jones Oil and Gas Index which i think is the best looking of all the charts i'm posting this morning. Now it doesn't mean today you run out and buy but at least the big energy stocks have stopped going down and did not undercut their lows last week with the rest of the market. So keep an eye on this for relative outperformance. If energy is the leader it would increase the arguement that we're in a bear market rally and not some new bull move. It would be unusual for the prior leadership to retain its leadership status in a new bull market. Besides we're not even sure we've actually hit "the" bottom. It certainly feels like "a" bottom.

Dow charts also look like they are building tradeable bottoms in here for a nice bear market rally that could last awhile. Again this is in the context of a tradeable bottom. Of course I saved the MLP index for last since those charts still look pretty pathetic

The best thing one could say here is on the daily chart the mommentum into last week's new low was not as strong as the prior move to 150. We're still working on the weekly chart above which needs more time to give us a clue. But that rounding top on the daily at 220 is formidable so needless to say we have a lot of work to do as we wallow in the depths of bear market despair.

If you think we're at a tradeable bottom and you want to play energy there is a new triple leveraged energy ETN whose symbol is ERX. At least if we're going to get a tradeable move its best to have some leverage. Ladder in carefully for the best results in dollar or more increments. These things can move in both directions.
Day before Thanksgiving with lots of market data coming out this morning. Stock futures are 15 points lower on the S&P after our first 3 day rally since August. My guess is that we'll see some early movement and then everyone will start to go home. No individual corporate developments this morning. Everyone is still in business last i looked. Energy higher after being down hard yesterday. We'll work through the data and the open and take it from there.


Anonymous said...

This is a little eerie. The AMZ is up almost 6 pts, a 3.5% move, there's only an hour and a half left in the trading day, and I'm the FIRST poster on this blog since Joe kicked things off well before the market opened!

Are you guys already dipping in the eggnog?


P.S. Happy Thanksgiving!

SHK said...

I'm just sitting here, stunned, assuming that this is all a mistake that it will all go away in the last 90 minutes. Happy TG to all!


Bruce said...

It's a low volume, pre-holiday session. Any sharp movements today probably don't mean a thing.

Happy Thanksgiving to All!


Bruce said...

From "Rev. Shark" (who has been remarkably on target throughout this mess):
(subscription required)

"So often the days around Thanksgiving have a bullish bias because the trading is thin and we are approaching the end of the month, when folks want to add something positive to the books. The action today is pretty classic, but a few things should keep us from being too bullish. First, volume has declined on each of the days the market has moved up. That is a classic "bearish wedge."

Second and more important is that the market has consistently reversed after breaking key technical levels. We saw this when we made a new yearly low a week ago and then reversed sharply, and also when we broke the downtrend line to the upside at the beginning of November and then rolled over. Market players have tended to "fade" key breakout levels, and we are getting close to another one here as we try to break the downtrend line again.

I would cut back long exposure and/or tighten up stops around here. This is not the time to chase things higher. "