A day of consolidation

After rising more than 4% last week, it is expected that some consolidation will take place.  and if the consolidation comes with the light volumn, it is even more encouraging, since it indicates most stock holders did not rush to take the profit.  So, hopefully, we will see a rebound tomorrow.

However, we are at a very delicate point, almost all the important indexes are up against either 50 days' MA or 20 days' MA,  it is almost a make or break time. Even though our short term inclination is "bullish", you just cannot be too complacent.

$VIX touched 50 day MA yesterday, but bounced off it quickly today,  GLD and Bonds did the same thing, it is the Technical analysis at its best. it looks like that some peoples played the market exactly according to the scripts of TA. 

Many peoples in the wall street dismiss TA and chart reading. "There are a lot of charts on any sinking ship" as they would say.  However, when the economist cannot agree whethere there will be a recession, and investors lost the sense of where the market is heading, the "chartist" become important.   You have to rationalize your action, any method is better than pure intuition.

As we pointed out yesterday, agriculture (DBA, MON, MOS, POT etc) continue their ascends, and so does coal/mining (BUCY, MEE, FDG), by just looking their technical side, it seems like they should have more room to grow.  Even though chinese stock has rosed handsomely today, I believe it is probably a better time to short them rather than to buy at the dip.