A day worth noting

A day like today obviously worth noting for the bull, because many rebounds begin with a big reverse, however, one has to remember that this is only a necessary condition, not a sufficient condition.  In other word, a big reverse day like today does not always gurrantte an inflection point.


Moreover,  it smells more like a short covering than anything else, as a matter of fact, many stocks held well lately lost the ground today while those stocks suffered most get the biggest bounce.  Case in point, LFC gained 3% and CMED lost 2.6%.  In my "buy" screen, exactly half of the stocks did not recover with the market, but the "short"  screen list has 60% went up.  Given an incresed bear bet (see WSJ) lately, it is not surprise to see some short covering.


$VIX is at 29, just a couple of points off the high, so, we are still faced with a very volatile market, and obvioulsy very jittery crowds.   SP500 and DJIA were out the oversold while NASDAQ is sitll in the oversold territory (RSI)..


Now, we need some positive news from earning front, and some help from Government or the ECB.  and if a follow through day come in the next 2 or 3 days, this rebound could be more convicing.


Anyways,  One day does not make a trend, so, do not get too complacent, there will be more rough sailing ahead.  Given the wild swings of the market lately, One wrong bet could cost all the gains that are carefully accumulated in this tough enviroment.  

 
Caution ...