Wonder of all wonders, we finally got a decent Bounce Play, a little short of a Kahuna Up, but we will take a 2-Bucket Skip any day when the previous few days had us still stuck in the mud. The Tide is in and the Boats are rising fast and did what I set as targets for the Market to do.
We got what we asked for right on the nose, and the lesson learned is that it is important to have “What If” Plans for both Up and Downside Scenarios to guide you:
Although we all know that the Volume was under par yesterday, it has to be excused given the unusual circumstances of the Hurricane Irene debacle. However, we had the 2+ Bucket Skip, two Eurekas in a row, and humongous Adv/Dec and Adv/Dec Vol as shown on the next chart. Note also that %B is now at 0.71…the Safe Zone:
So, the Game Plan gets easier…I didn’t say “Easy”, but at least we have proper Stakes in the Ground and Measuring Rods. On the Upside the next resistance is the old faithful Line in the Sand at 2600. How many times have we been up and down that yardstick?…too many for most. On the Down Side, I spy with my beady eye an Island Gap, like the one between L.A. and Catalina Island. Beware of Island Gaps…they usually get filled and the Bulls must hold at 2480 or the Party is over. If it holds then the next move up should be a continuation of the Market in Uptrend and hopefully we avoid the ever present “Fakey” which we now know only too well. Just look back on past blogs for that predicament that plagued us a year ago until after four months we started a Fresh Rally on 9/1/2010…we are but a couple of days from that anniversary, so we then turn from Despondency and Throw in the Towel to Hope and Relief:
The Bottom Line I hope you will agree is that this good stuff is working for us and keeping you on the right side of this Yo-Yo Market.
Best Regards, Ian