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Is it possible for bears to be frugal? – TVO MB 3-08

The Heat Gauge opened at SWELTERING on Friday, and slowly cooled off for the rest of the session. This type of volume action is good for the bulls, as it shows a gradual turn away from the distribution of last Wednesday and Thursday.

The SPY 272 gap, however, remained unfilled for the time being.

Were the bears just being frugal about the 200 day MA break, taking their profits on the side of caution? Hmm, I know of no bears that fit that profile.

Or maybe the bears are avoiding the quick flush to fill the gap, as that would actually increase the likelihood that we go higher from here? Well, that’s also a stretch, as the very nature of bearishness is to tear it down first, ask questions later.

What’s more likely is that most folks were so focused on the support of the 200 day without noticing the 50 day MA (which is also famous for its massive buy programs) looming right beneath it. As to how soon those buy programs will really start to kick into high gear, only time will tell. -MD

Sentiment: EAGER – Markets are in accumulation mode and big institutions are buying at a slow and steady pace.

Volume: -11% – Today’s volume was lower than the previous session.

Real Feel: TORRID – Bears were in control of the session with moderate buying under the surface.

Cycle: BEARISH I – Retail investors are uncertain and very light in their holdings.

Portfolio: BUY – The market is healthy and it’s a good time to contribute to long-term investments.

Next Day Move: UP - The probability that SPY will close positive in the next session is 59%.

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