Even though price is about the same as the previous two rallies, this one feels different. We are seeing beta/tech acting better. We are seeing a few names in that SOFTWARE group setting up or edging out of range. We are just feeling the overall tone as being much better.
We are now starting to close in on that massive “waterfall” breakdown…which should provide near-term resistance. We are now starting to close in on that massive “waterfall” breakdown while markets are now very, very, very overbought…with all major indices still below the 50 day moving average, which is still below the longer-term 200 day moving average.
Potentially coming out of bear markets takes time. It takes 2 steps up, 1 step back. It takes some scare days. It takes a process. We are not in the “new bull phase” camp yet but are open to the possibility. We have moved up in price about as much as the past two failed moves. If sellers show up soon, it would not be good news as rallies and failures into resistance are a part of bear markets…but again, the Fed matters. We hope it’s a new bull so we don’t have to write as much. Next up…not earnings but what will matter more, the reaction to the earnings…and oh yeah, the Fed has 9 speeches this week including one by the head honcho, top dog, big cheese.
From our September 8th report: “Leave no doubt, the over-owned, over-loved and over-leveraged “TECH” areas are now under serious pressure. As we have been reporting for weeks, the chasm between “TECH” and the rest of the market was the widest we had seen since 1999. We will now see that chasm narrow. To what extent? […]