AND THE EXPERTS SAY...

I had another title prepared but I'm trying not to swear too much on this blog. I was expecting a possible snap back rally, but his was a mighty big snap back. I was left with a lot of mixed feelings after the market closed. I've spent the last few hours looking at charts and indicators to see where we might be going in the next few days. The conclusion...I have no idea. There is almost an equal argument for both a rally and a decline. As I've talked or listened to other traders, I've been relieved to hear that they don't have much of an idea either. The Market Trend Signal (www.markettrendsignal.com) is showing a shift to a short term bullish trend. I'm inclined to follow this signal since it has been very accurate over the last several months...however, I also know that we could be in for some whipsaws over the next few days. I wouldn't get into any new positions (for obvious reasons) and I would make sure I had well defined stops on any open positions. Here are some reasons for the confusion. Bonds and Gold were up today which is usually a bearish signal. The VIX closed at a new recent low which would be viewed as a bullish signal. Tomorrow I will look to see if there is much follow through to today's move. I will see if there is any divergence in the VIX (like a rise in the VIX and a rise in the market). I will also look to see if there are a lot of stocks participating in any continuing rally in the market. If the market rallies higher...but fewer stocks participate...this could be a bearish sign. For bullish patterns, I like the SMH and the XLF. For bearish patterns...well I don't trust many bearish patterns after today's move. This might change after tomorrow. I'm so glad that I was able to give all of you a clear outlook for tomorrow...I'm kidding of course.