Browse > Home / General Market Comments / Market Recap: Surprise Bounce, Kinda

Market Recap: Surprise Bounce, Kinda

July 8, 2008 10:11 PM

perplexed.jpgOk, I was mistaken. According to BigCharts the Dow low yesterday was 11,094. I guess I missed that as I never saw it get that low, my bad. Well, that does not bode well going forward, IMO. If this rally holds, it will be the first important low I have ever seen without a strong rejection of a low. Possible, as anything is always possible, but I will take the side of history and suggest it is very unlikely. This smells a lot like an oversold bounce and not a bottom. We have no firm low on the Dow and we have no firm low on the SP500. To say that I am skeptical is the biggest understatement ever.

The bounce did not overly surprise me as I said 2 days ago that the sentiment was so overwhelmingly bearish that it could bounce. When every person alive thinks it is going lower I become skeptical it will. That is why I have become VERY skeptical that the 10,600 range will be the Dow low, if we get there. If every person believes that is the low, then it won’t be the low. But that is how I view the markets.

In addition, oil caused the “bounce” by falling another $5.33 today. The big picture on oil is this however. Oil dropping $5 bucks is NOTHING. That is not going to help the consumer in the least and nothing has changed. It would have to drop huge to make a material impact on the consumer, not $5 dollars. The direction is good, and that is giving the market some hope, but that is all - hope.

I am not sure where the area is to be careful here. It appears to be 11,510 on the Dow and 1292 on the SP. One thing is for certain, if the market does get serious pressure again, there is nothing to stop the slide, IMO. Be careful on any and all rally’s as the odds of it being permanent are very, very slim.

Written by Tom@StockBlade.com · Filed Under General Market Comments 

Comments

Got something to say?