With futures pointing lower, I think it will be important to see whether weakness begets buying. My report contains some observations from the past week. With sentiment moving lower and some signs of technical improvement, I think excessive bearishness could be dangerous. Meanwhile, there is still time needed for more repair and healing, which prevents too much bullishness. Some more range/base building might be good for a fourth quarter or earnings season rally, even if it is just a bear market one.
I'm hearing the type of chatter and buzz about gold and silver miners that normally precedes a big move in these issues, and will be watching with keen interest how the story on them continues to develop.
Thank you Eric for your always remarkable synthesis of market forces from many approaches.
Writing such weekly reports demands much time and persistence and I'm sure most members are learning a lot from your generosity in sharing your hard work.
Billy
Thanks for the kind words, Billy. The performance of leaders like AAPL, AMZN, LULU, and ULTA, amongst others, is exactly what I was looking for today. Numerous gold and silver equities (EGO, GOLD, NEM, SLW) closed higher despite the selling in the underlying commodities. The down tape masked underlying positive money flow, too. I just read Marder's Market Comment, which was very succinct.
Last week was an interesting week. My current review follows-up on some topics discussed last week, and the important market feedback received. I wish everyone well navigating through this environment.
Hello friends. I have kept this report shorter. The primary change from my last report is that action in leading stocks has become worse. I believe the tape last week masked such weakness.
I'd like to emphasize the importance of an open mind. I am prepared for a strong down move. But just a couple weeks ago, I thought the conditions for a bear market rally were emerging; however, the action quickly deteriorated and caused me to reassess the situation. I urge everyone, especially those who are new members, to do their own weekly reviews for your own records. Doing so will improve your situational awareness and reaction times. The weekend is a good time to do it because the market is closed, and you can focus on longer timeframes to put the daily action into context.
Good stuff Eric. This is indeed very dangerous market to participate as the extreme volatility makes it difficult to manage risk both long or short. Cash continues to be the best position in this environment even for most seasoned pros.
Please find attached my weekly market observations.
In addition, I include a trade report from last year, coming out of the 2010 correction. There was a small group still posting their monthly trade idea in the EV Training group. The reason I share this particular trade is twofold. First, it highlights the way one can synthesize EV with other methods like growth or momentum investing. Second, it highlights why late summer 2010 is so much different than the current period. There were so many stocks moving in a powerful fashion on big volume at that time. Price does pay, but volume speaks. I don't see the same type of landscape right now, and am consequently more skeptical of the sustainability of the recent advance.
I also encourage everyone to read Aly's CSI, which is top notch as usual. Jerry also posts his leader's index, which is worth checking regularly. There are so many resources here!
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