A slow start to the session today as yesterday’s session left many gun shy. Two intraday buying sprees helped push the market to their highs of the session. Unfortunately, the market was unable to hang onto these gains. While we were able to close positive it was not an explosive session. The good news for the bulls is we did not continue Wednesday’s decline. It would have been an ominous sign had we continued the decline. For now, we still have a confirmed rally. Although odds say it will fail we have yet to fail. Stay patient and let the market come to us.
There will be an effort by many to force trades here. We went into it last night, but we cannot stress enough forcing trades is a very bad idea. This market and its gaps is just not a healthy environment especially for end of day traders. Chasing introduces another risk element. Chasing beyond a proper buy point can lead to cutting a winning stock. Often times a stock will pull back below its proper buy point, but since you chased the stock shook you out only to see it higher a week later. This market is not one for the weak, but with a proper strategy you can take advantage and make huge gains.
Sentiment from the AAII and NAAIM survey remains the same week over week. NAAIM continues to hardly exposed to equities for the 2nd week in a row. We aren’t seeing active managers rushing to equities just yet. AAII bulls and bears are essentially even at 35% a piece. Sentiment really is not flashing a strong signal one way or another. Remember, NAAIM was low to begin with when this market decide to tank. More to come.
There is still a slight chance this market continues to march higher and while we are not heavily long we will get our chance. Odds still favor us rolling over and retesting the lows where we would expect to see well-formed bases. Let’s not forget seasonality is not in our favor.
At some point the stars will align for us to take advantage. Until then we will exercise patience. Get out and have a great weekend.
