So, for the record, because of volume we have not had a follow-through day for either SPX or COMPQ.
I listed a couple comments that pertains to this discussion in another thread:
https://discussion.fool.com/t/missing-out-on-the-biggest-up-days-in-the-market/115448/3
The key take-away is that in looking at some bear markets in history, there are often many rally attempts before success. A graphical way of showing this is to look at a TOS chart using the thinkscript program to map Rally Days:
This is just half of the Dotcom Crisis recovery. While many did have a week or so rally, they all failed mainly by eventually the rally low being undercut.
A couple other aspects to consider are that most (but not all) are very strong candles for the Rally Day and FTD. Also, there is a tightening of the volatility, often involving recovery of the 21 sma or 50 sma when there is a successful rally. But that is an unquantitated observation, not proven fact. The VIX recovery to lower, more normal levels does support that. Will need to look at that closer.
Probably should post these comments to another thread, but will do it here (I’m lazy). This is a process to evaluate Market School perspective and I think it has a lot of value. However, at this point I don’t think that it should be used alone. I’m saying that from my perspective and opinion. I’m saying it because while we failed to get a true FTD, there are a lot of signs suggesting we may be bottoming. There is no absolute call, but things to consider. First, the VIX may have peaked. It is still very elevated at 37, but spiked and lowered. Would love to see it below 25-30 at least, but it’s trying. Other sentiment scales have also peaked and that generally means, times are a changing. The other key thing was that we had a good shift to aggressive sectors. XLK, XLI, XLF, XLC and XLY all were up. That is common in the move to change direction.
Then there’s Trump and China. China is holding any shipping of critical rare earth metals. Trump eliminating tariffs on computers, phones and chips…oh wait, that’s only until I get the itch to f with the world…
I am positive and bullish, but with very close stops and even day trading when I can. You do you. But damn, I’m geting too old for this crap.
Happy hunting, but let’s be careful out there,
Lakedog
PS:
I was supporting your statement. A LOT of comments are repeated by IBD on a spectrum of media they distribute. Justin Nielsen made this point also. Webby multiple times. Don’t remember if it was Webby or Justin, Webby I think, made the basic same comment and stated that Bill would have limited them to invest only 5%. Things just seem to popup and even change some. The message I’m starting to get is that it’s “Do as I say, not as I do” to a large extent. Which is fine, mold the approach to what fits you.