The market has now sold off for two straight days. Of some concern is that I’m not seeing evidence that anything is overdone to the downside. For example, I looked at all stocks in the S&P 100 tonight along with my list of 115 highly liquid ETF’s that I track. None of them made a 10-day low on Thursday. None. Breadth is not suggesting we are due for a bounce.
Price-wise we are back to the middle of the recent range. I have very little to add tonight so I thought I’d do a quick review of outstanding studies. Earlier this week there were several bearish studies which had short-term influence. That influence is beginning to dissipate. Those studies may be found here and here.
Prior to these I had posted several bullish studies with intermediate to long-term influence. Each night in the Subscriber Letter I list all outstanding studies, their time frame and their bias. I find it a useful graphic for helping me organize my thoughts and determine my own trading bias. The bullish intermediate-term studies I consider active are listed below along with the time-frame they looked at.
March 24, 2008 Nasdaq Leadership Bullish – 1-10 weeks
March 19, 2008 Bottom Explosion 2 – 1-20 days
March 19, 2008 3.5% Up Cluster – 10-20 days
March 17, 2008 Consumer Sentiment Stretch – 1-12 months
March 12, 2008 Bottom Explosion – Now What? – 1-20 days
In reviewing them you may notice that many are just beginning to reach their sweet spot.
While the pullback may or may not have farther to fall I am not seeing evidence at this point that it will be anything more than a pullback.