Market Recap: Buyers Above 818
November 18, 2008 5:01 PM
I mentioned today that there should be buyers above 818 and there was. The only thing I did not like is that it never made a firm low on the day. This was simply buying above 818, simple as that. The only question has been, can they hold 818 and if so, how low before there are buyers. 826 was today’s low, the risk/reward is simply too compelling to ignore at that level. This is why I said days ago that I wanted to wait it out and be long above 818. I was not around late today, so did not have the chance.
At any rate, today was a bit unconvincing. Not sure what to make of that other than volume may continue to be very low until the GM issue is settled, one way or another. It just doesn’t seem like they will take this down with force until they get the news. I said early on that “today likely will be like a fed day” with shorts on the sidelines until the news breaks. The chart clearly looks very similar to a fed day. This appears to be far more like a lack of shorts than actual conviction of buying. Actual buying we should have seen a forceful move off a low. We did into the close, kinda, but that is because it was a “close day” and if they sniff positive, shorts will cover at the close. The move just looks a little shaky to me.
Today’s low is likely important now, even though it never made a clear low on an intraday chart. I still believe however the market will probably be in a holding pattern until congress decides what to do with the Big Three. We will see.
Update: I looked at the volume and it appears that the volume was actually pretty good but most of the volume came in the last hour. Not surprising as I said - close day. There is something about this move today that just doesn’t feel right. Maybe I am getting used to huge powerful moves that seem convincing. It didn’t feel like that today.
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