Monday, October 20, 2008

10.20.08 - Follow the Bouncing Ball


A bit dizzying, isn't it? However, the cumulative tick and advance decline lines continue to show strength as the VIX peels back some 11-12%. There is a clear desire to buy even as supply is released into the effort, containing gains thus far. Which will prevail?

10:35AM PST: Caught a bid after an extended retest of the VWAP. Volume is light. If we close up on the day, we may get a traditional bullish MACD cross. If we can hold within the recent (granted, very wide) range, one could begin to make an accumulation argument here even though we haven't seen a lasting bounce. I know, pretty big series of "ifs".

12:35PM PST: Break-out set up?

1:25PM PST: That was a resounding 'Yes'! Are the Lehman CDS 'winners' counting their chickens before they've hatched? We'll see tomorrow. A side note, days like this RSI(2)=91.7 80.1 set us up for the possibility of an overbought unload in what remains a bear market.

o RGE - Size of Lehman CDS Exchange?

3 comments:

GS751 said...

I have a feeling that with all the commentary the money is gonna flow into the high yielding sectors. Secondly I just don't feel the raging bull coming on. Do you read Trader Feed, he has some great stuff about the advance / decline line.

George

Jeff Pietsch CFA, Esq said...

Dr. Brett's blog is one of my favorites,

http://marketrewind.blogspot.com/search?q=traderfeed

http://traderfeed.blogspot.com/search?q=market+rewind

I think this may be a seminal week.

GS751 said...

Agreed.