We are much closer to the bottom.

From the recent market behavior, we are much closer to the bottom than ever before since the bear market started in Oct 2007.

Although DOW is below last Nov low, but the selling intensity and strength is pale compared to the last Nov low (see vix charts). We also have some major non-confirmation in the major indexes, with SPX holding above last Nov intraday low and COMP way above the Nov low. The longer this non-confirmation hold, the bigger the chance of a market rally.

Look closer to each individual sector. Some puzzles are falling in to place for market to build some momentum to the upside. I think we have already seen the financial capitulation on Monday. Oil and the energy complex start acting well, too. Gold looks like topping out. All these factors were strong headwind to the markets in this down leg. Now, the wind is blowing the other way and provide some tail wind to the market.

One notable exception in this down leg is still the big-cap tech, major force behind COMP. They are holding up well compared to other sectors. Ideally, we want to see a final capitulation on these groups of stock (down 5+% with the market in one day) to put in the final bottom.

My strategy is to accumulate shares in the wake of weakness here.

From the recent market behavior, we are much closer to the bottom than ever before since the bear market started in Oct 2007.

Although DOW is below last Nov low, but the selling intensity and strength is pale compared to the last Nov low (see vix charts). We also have some major non-confirmation in the major indexes, with SPX holding above last Nov intraday low and COMP way above the Nov low. The longer this non-confirmation hold, the bigger the chance of a market rally.

Look closer to each individual sector. Some puzzles are falling in to place for market to build some momentum to the upside. I think we have already seen the financial capitulation on Monday (http://blog.wenxuecity.com/blogview.php?date=200902&postID=32840). Oil and the energy complex start acting well, too. Gold looks like topping out. All these factors were strong headwind to the markets in this down leg. Now, the wind is blowing the other way and provide some tail wind to the market.

One notable exception in this down leg is still the big-cap tech, major force behind COMP. They are holding up well compared to other sectors (http://blog.wenxuecity.com/blogview.php?date=200902&postID=25415). Ideally, we want to see a final capitulation on these groups of stock (down 5+% with the market in one day) to put in the final bottom.

My strategy is to accumulate shares in the wake of weakness here.