The Friday before a long weekend usually consists of all the
trading activity occurring in the first hours of the day followed by a mass
exodus of people getting a head start towards their favorite beach destination.
As such, I wont bore you with any charts of stocks or indices. Instead I will
leave you with some commentary from well known authors just so you get a flavor
of whats on their mind.....
In the meantime,
while "everything" is now getting hit (which is a longer term warning,
but it's actually positive from a shorter term point of view, since this sort
of phenomenon usually happens late in a selloff), we haven't changed our
opinion that the most vulnerable areas that have to be avoided on the long side
remain "growth," along with many Industrial issues, Material stocks,
and a long list of Oil-related issues that we've been negative on. At the same
time, from a longer term point of view, we're still bullish on many
conservative "total return" ideas (although, near term, they, too,
are now pulling back). With that said, now let's once again turn our attention to
the deteriorating longer term trend...." Stan Weinstein
"...A renewed decline or failed rally, though, would suggest yesterday’s intraday gains were a repeat of Monday’s short-lived rally. In that case, selling could accelerate into a renewed decline that takes out Tuesday’s lows followed by a further decline to test likely next support at the 200-day moving averages for the various indexes. On balance the weight of evidence appears to favor a successful follow up rally. That is, short-term sentiment suggests enough bearishness to serve as a contrary indicator, most breadth and momentum indicators are at, or close to oversold levels, and price/volume action appears positive." Lowry's
"...A renewed decline or failed rally, though, would suggest yesterday’s intraday gains were a repeat of Monday’s short-lived rally. In that case, selling could accelerate into a renewed decline that takes out Tuesday’s lows followed by a further decline to test likely next support at the 200-day moving averages for the various indexes. On balance the weight of evidence appears to favor a successful follow up rally. That is, short-term sentiment suggests enough bearishness to serve as a contrary indicator, most breadth and momentum indicators are at, or close to oversold levels, and price/volume action appears positive." Lowry's
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