In the history of the stock market there’s one thing that has held true, over and over again… When the crash finally comes, there are never any bears around to enjoy it. And the when the real big dip comes (that everyone wishes they bought in retrospect), the whole world is still too bearish to notice.
Right now there are still a lot of bears out there, but it’s pretty easy to notice that we’re far from a dip. So what’s propelling things higher? Well, believe it or not, it’s lack of volume. We’ve had several distribution days in the past couple of weeks, but while advances and declines are in such a tight ratio, lower volume is just not enough to fuel momentum, up or down. And as long as things stay more or less equal, the “default” direction kicks in (which has generally been UP since the dawn of time).
Market internals are showing, though, that we are on the edge of OVERSOLD territory, while volume in the bigger picture has now moved our General Investment Strategy into “SELL” mode. The projection at the moment is that in the short-term it’s looking like another slow run up onto the Fed next week, then likely followed by a back fill… and then repeat that over and over again, until there are no bears left standing. -MD
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