{"id":615,"date":"2010-08-28T16:09:00","date_gmt":"2010-08-28T16:09:00","guid":{"rendered":"http:\/\/blog.smartmoneytrackerpremium.com\/2010\/08\/950-not-yet-im-afraid.html"},"modified":"2014-07-07T04:13:45","modified_gmt":"2014-07-07T04:13:45","slug":"950-not-yet-im-afraid","status":"publish","type":"post","link":"https:\/\/blog.smartmoneytrackerpremium.com\/2010\/08\/950-not-yet-im-afraid.html","title":{"rendered":"950? NOT YET I’M AFRAID."},"content":{"rendered":"
The better than expected GDP numbers threw a slight monkey wrench in the trading plan (for you traders out there). I was expecting a gap down open that would break through the 1040 pivot. The plan was to buy into that gap with a stop under the morning intraday low. The market did break slightly below 1040 (1039.70) so in theory if one was quick they could have jumped in right there. I doubt anyone was that quick, so I suspect almost no one caught the exact low. Perfect timing isn\u2019t critical though if this is a daily cycle bottom, as we should have at least 2 to 3 weeks of upside ahead of us. I\u2019m assuming the market doesn\u2019t drop back down to test the lows on next Fridays jobs report.<\/span><\/p>\n I really doubt it will. I think the jobs report has probably lost its ability to move the market at this point. Until we start to roll over into the next recession we are probably going to continue to see mildly positive jobs numbers for now. When we start seeing 200,000 and 300,000 jobs being lost again then we can look for the monthly jobs report to start affecting the stock market. Until then I think it\u2019s not going to have much effect on stocks. With that in mind I really doubt the market will be coming back down next week in order to bottom on the employment data.<\/span><\/p>\n Now before everyone gets all excited let me point out that today was in fact an outside day and as such we don\u2019t officially have a swing low yet. We can\u2019t have a daily cycle bottom until the market forms a swing low. That being said, today was a 90% up volume day. That is a panic buying day and this late in a daily cycle that usually means smart money has recognized a bottom and is rushing to get back in the market. <\/span><\/p>\n
I realize almost everyone is now convinced the bull is dead and we\u2019ve started back down in the next leg of the secular bear market. Now maybe we have and maybe we haven\u2019t. I\u2019m reserving judgment until I see the last two of my bear market signs come to pass. Namely the 200 day moving average has to turn down and we must get a Dow theory sell signal (BOTH the industrials and transports must close below the July lows). Neither one of those things has happened yet. Until they do we are in no man\u2019s land. As a matter of fact, according to strict Dow Theory the primary trend is assumed to still be in force until a sell signal is given. Since we obviously don\u2019t have that, and aren\u2019t really even very close to it yet, I\u2019m going to abide by the rules and assume the cyclical bull is still alive. <\/span>
Next I\u2019m going to point out we don\u2019t even have a confirmed down trend yet. So far the market is still making higher highs and higher lows. That is the definition of an uptrend. In order to reverse that the market would have to break below the July low or it will have to bounce out of this daily cycle bottom, stall out, and then move back below Friday\u2019s low (I\u2019m taking some liberties here and assuming Friday did in fact mark the cycle bottom.)<\/span>
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