Stocks were hit hard yet again early Thursday, but a late rally brought the major indices back into positive territory with the small caps actually gaining 1.5% on the day.
Granted, a small gain in the face of what stocks have been up against for the last several days is not overly impressive, but volume was much higher, which adds to the reversal day's credibility. The questions are; is the reversal on high volume legitimate, or is it options expiration related? Is this just a typical 2 to 3 day rally in a bear market that needs to be sold, or is the S&P 500 chart trying to create a right shoulder of a potential inverse head and shoulders pattern?
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
We have seen a couple of these reversals turn sour very quickly during this bear market (see mid-Nov above) so I am still in a "show me" mode.
The sentiment surveys were quick to jump on the bullish bandwagon after the Santa Claus rally, which to me was showing too much complacency, but the recent sell-off took the bulls to bears ratio all the way back down to 0.60 on both the AAII survey, and our TSP Talk survey this week.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
With today being options expiration week, having a holiday on Monday, and Tuesday being Inauguration Day, I am a little reluctant to make any type of major decisions on my account today, even though I'd like to catch a bounce if we are actually going to see one.
Recent post-options expiration Mondays have been quite wild - both up and down. That leads me to believe that Tuesday could be a market mover - I just don't have a clue yet, as to which way that may be.
That's all for today. Thanks for reading. Have a great long holiday weekend!
Granted, a small gain in the face of what stocks have been up against for the last several days is not overly impressive, but volume was much higher, which adds to the reversal day's credibility. The questions are; is the reversal on high volume legitimate, or is it options expiration related? Is this just a typical 2 to 3 day rally in a bear market that needs to be sold, or is the S&P 500 chart trying to create a right shoulder of a potential inverse head and shoulders pattern?
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
We have seen a couple of these reversals turn sour very quickly during this bear market (see mid-Nov above) so I am still in a "show me" mode.
The sentiment surveys were quick to jump on the bullish bandwagon after the Santa Claus rally, which to me was showing too much complacency, but the recent sell-off took the bulls to bears ratio all the way back down to 0.60 on both the AAII survey, and our TSP Talk survey this week.
Chart provided courtesy of www.decisionpoint.com, analysis by TSP Talk
With today being options expiration week, having a holiday on Monday, and Tuesday being Inauguration Day, I am a little reluctant to make any type of major decisions on my account today, even though I'd like to catch a bounce if we are actually going to see one.
Recent post-options expiration Mondays have been quite wild - both up and down. That leads me to believe that Tuesday could be a market mover - I just don't have a clue yet, as to which way that may be.
That's all for today. Thanks for reading. Have a great long holiday weekend!
