Is this a Bear Market Bounce? Or have the sellers become exhausted?
We won't know the answer to that question for awhile, but its fairly certain we will see a bounce here. I think the bounce will be meaningful in that it will be stronger than the other bounces we have had over the last several weeks as we have taken our waterfall ride into the Bear pool. I base this on some nascent trend reversal patterns in the 1 and 2 hour momentum charts. Forecasting from those can be a little tricky because when you think you are seeing clear weather coming you find that you were just in the eye of the hurricane. We will have to watch our daily momentum indicators to tell us if the bounce will turn into a real trend reversal or not.
There is only one non-commodity sector that is making a stealth bull move right now, and that is biotechs (BBH). Also showing improvement, but sill sailing in hostile TradeWinds is pharma, PPH, and healthcare, XLV (do you see the theme?). Take a look at that if you want to play the long side. Techs are stirring a tad, but nothing to get real excited about just yet.
Caution, bordering on fear, is the word of advice for the long players
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