I was certainly not looking for a rally of this magnitude today. I can attribute a few reasons for the rally such as fall in LIBOR rate, the narrowing of TED spread, talk of another stimulus package etc. All this really doesn't matter, what matters is that the market rallied on positive news for a change. But to put the rally in perspective, the rally was accompanied with low volume. Most of the heavy lifting was done by a rally in the beaten down commodities sector.
Carter Worth, Chief Market Technician of Oppenheimer and Co. Inc, was on CNBC tonight. He said that they were all in on the long side now. He has been bearish until now. Oppenheimer upgraded the U.S. energy sector to outperform this morning. It may have caused the rally in the commodities sector and in turn the market. Just a food for thought.
As for me, I will give some more time for the bear case to play out. It still looks like a smart money trap. If the market stays true to its form and takes the path of maximum frustration, it should go down as most of the bulls and bears are not expecting that. If it chooses to just frustrate me then it will go up :). AAPL is set to announce its earnings tomorrow evening. I think the reaction to its earnings on Wednesday should tip the market's hand. No need to jump the gun yet!
Carter Worth, Chief Market Technician of Oppenheimer and Co. Inc, was on CNBC tonight. He said that they were all in on the long side now. He has been bearish until now. Oppenheimer upgraded the U.S. energy sector to outperform this morning. It may have caused the rally in the commodities sector and in turn the market. Just a food for thought.
As for me, I will give some more time for the bear case to play out. It still looks like a smart money trap. If the market stays true to its form and takes the path of maximum frustration, it should go down as most of the bulls and bears are not expecting that. If it chooses to just frustrate me then it will go up :). AAPL is set to announce its earnings tomorrow evening. I think the reaction to its earnings on Wednesday should tip the market's hand. No need to jump the gun yet!
2 comments:
Good insight and market seems to revisiting and testing the bottom.
one-third of SP 500 companies report earnings this week. releases so far have been weak and guidance even weaker.
we are yet to have two consecutive up days in stocks this month. so much for all the talk of "bottoming".
i say we aint seen it all yet. risk-reward skewed in favor of shorts.
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