We’ve now had 3 days of thrashing around the 50-day moving averages on the indices. I’m getting a sense of déjà vue because this is exactly what happened at the end of September. The S&P chart shows this action well:
You can see how deeply oversold we are by the stochastic reading. Unless we get some really bad news it’s hard to think that we won’t get some kind of bounce here.
There have actually been a lot of bullish reversal candlestick patterns made over the last two days. Yesterday made a lot of inverted hammers and two days ago there were a lot of bullish harami patterns in individual names.
I have a papertrading account over at optionsxpress and I’ve been buying some QQQs here at the 50-day … I think your assessment for a bounce is probably correct … of course if I were really doing it right I’d be hedging with puts but that’s too much work when there’s no real money to lose.
Everybody knows that Thanksgiving Week is up! I’m reading that all over the web today. I know it looks like just another bounce, but I think we have more selling to do over the next few weeks. FWIW.