August 16, 2011

The press was saying the market was going down today because investors' thoughts are turning back to Europe. Actually, yes, KJ got out of his short position. That's why we were able to go down. The S&P 500 numbers for yesterday and today:

Monday: 71.80/252.54

Today: 71.64/158.49

That's still a pretty large negative number though, even without KJ. I think that explains why what was a pretty large down day at mid-day turned into a modest down day as the market almost got back to the even line but turned down at the end.

So what will KJ do now? I think he'll stay out for at least a couple days. Wednesday should be interesting. I could see it going either way. On the one hand, I could see us moving back up strongly for still one or two or three more days since there is still obviously a pretty negative sentiment. That was a nasty drop we had. People will probably remain cautious here for a little while until greed eventually takes over. On the other hand, I've seen days like today lead to a big down day the next day. People see that we were way down and then came back from the dead and go, oh, see, it could have tanked but it didn't, must be we're going up.

It's fun to guess. My volume numbers are rarely wrong, but I am frequently wrong when I'm just guessing. So it's just for fun. But I think we'll go up for a couple more days and maybe even get KJ to move to the positive side, whereupon the bottom would fall out.

My long-term indicator, the Nasdaq 100, was more positive today. The last two days:

Monday: 125.38/58.17 = 2.16

Today: 150.11/54.02 = 2.78

My long-term indicator has never failed me. We have not reached bottom. The market just needs to do a little more lulling people to sleep, there-there, that nasty drop is all over, everything's okay, come on back, everything's okay.

Rob