Gross Domestic Product surprised to the upside on Thursday bringing into question those who are doubting the current recovery. On Wednesday, Goldman Sachs lowered their GDP forecast from 3.0% to 2.7% giving traders a fright. Volume was on the lower side of things after Wednesday’s capitulation type trade. However, volume did rise above its average daily volume suggesting more than just a few came back into the market. Thursday’s action does not signal a new uptrend, it merely is day 2 of an attempted rally as we count Day 1 from the low of the correction. It remains to be see whether or not we head lower or higher, we should be prepared for either scenario.
At this point in time, it is unwise to get ultrabearish or ultrabullish. I am personally, leaning toward this uptrend resuming because many people are so decidely bearish. Do not get confused, my opinion means absolutely nothing and I’ll need to see more strength. On the flip side, a high volume reversal will shatter this view in a heartbeat.
All the conditions I laid out yesterday still continue to exist today. Like we saw in 2008 this can always get much more oversold. It is best to keep your defenses high and possibilities open.
Best of Luck
Thanks for your great analysis while josh is on the mends. Your level headed approach is a calming influence on this nubies emotions in this nutty market! Personally I’d like to see you remain the mainstay of the market commentary portion of this site, because you really balance out the high emotions of Josh.. I love it……THANKS