Tough Love for Tender Bears

Okay, I’ve wasted as much time as I can stand trying to embed this video into the page (apparently WordPress won’t cheapwad guest-posters who are not paying for their own account; who has time to for that?)

Michael Davey again – that’s right, the guy who comes on here and beats a dead horse, saying yet again that the bigger waves in a market move (down in this case) are more worthy of attention than the retracements (as in the counter-bounce we’re still waiting to see).

Consider only this, as you sit back and enjoy the weekend.

-Corrections fall faster that advances rise (and with more energy).
-Big moves in a market surprise nearly everyone in terms of magnitude.
-We are still young into this decline and there has yet to be any serious crash-type panic or dramatic wash-out volume; the fact that there has been a succession of down-only days is nothing bullish, or indicative of am imminent bounce.
-Participants have woken up to the fact that something is wrong, and yet nearly everyone has focused more on where a market might be bounce, where and what might be good to buy and and what higher level might be good to sell or short – very few are out there calling for selling here and now (even though selling here and now has been working for several sessions in a row).
-Bears who fought and fought for months are talking about why and where we should bounce. somehow most of them priced themselves out of this move.
-If you think sentiment is getting extreme and that means the market should bounce now on Monday…well, maybe it will…but understand that fresh moves downward which end the weekly badly have set up for dramatic down-Monday’s in the past. Everyone turning negative suddenly, at this juncture in the move, is a negative in my book (the market can in fact sell-off when everyone is suddenly selling; shocking as that seems). This is a negative at the moment, not positive.
-Monday’s have been far and away the most positive day for the market since the March lows. Therefore, Monday next week should be a good chance for a bounce, right?
-Well, sure to that last point, unless something has changed now in the rally from the March lows. If something has changed, then Monday could teach us a little about drama (and impress upon us that nothing yet had been very dramatic, if you get my drift).

Otherwise, sure, I would expect a bounce then on Monday.

Sleep tight.

Oh, I’m not done. I want to reiterate some tidbits from the Stock Trader’s Almanac, courtesy of Randomwalker commenting in the previous post. However, I still need him to clarify something for me, so for the meantime I’ll let you go (and edit it in here later). Just understand that history shows that down January’s can hurt, regardless of what CNBC is trying to spin.

In the meantime, I have some visual entertainment, on the subject of riding energy. Gravity is a beast – ride it like you mean it!

SNIPER KANABEACH

This weekend’s homework…