Here Is Why I Think The Stock Market Just Bottomed
“As the chart above shows, the markets finished near the lows today, so to not see more selling to start the day would be surprising. In fact, what I would like to see is a gap lower on heavy volume, followed by a period of stabilization, and then a sharp turn higher mid-afternoon, with a positive close on the day.
Where would that turn occur? It is a good question, and I shall take a stab at it, and say 2,633. Again, this merely a guess and for entertainment purposes.”
Genius or Dope
So either I’m a freaking genius or there some level of predictability to the stock market. For the most part what I wrote last night is precisely what happened in my opinion, even the turn at 2,633. There are no such things as coincidence, and what seems like chance, isn’t. Anyone who reads this commentary daily knows I never brag about my calls, and will almost always admit when I have been wrong.
But the stock market gave us exactly what I would have liked to see in a bottoming process; a sharp gap lower on the open, followed by snap rebound and the testing and re-testing of a bottom. That testing came at 2,633 on two occasions, after the initial plunge.
The chart has a fairly classic double bottom, followed by an overwhelming wave of buying going into the close of trading. The setup in the close suggests higher prices are coming with a rise back to around 2,740, in my opinion.
The 2,633 level is no random level by any means, that was the gap that was created in the S&P 500 chart on December 8, that went unfilled. Even more ironically the market jumped that due to the strong November job’s data.
We shall find out in a number of days time, just how smart or stupid I am, but you can’t fault a guy for trying.
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