- Dip buyers exhaust themselves. Yet another weak day was bid up early morning and then buyers exhausted themselves and market reversed. A textbook case of how momentum suddenly turns and risk of trading momentum. If you are not careful you can end up giving up lot of open profits.
- Is this start of something big or mere garden variety congestion in a rally which did not have a correction on the way. We will know if we find 4-5 days in next 10 days where the 4% bearish readings exceed 200. Most of the time down moves are characterized by back to back high readings on 4% bearish. Usually in a down move there is rush to get out.
- Good things about corrections is it produces ideal set ups in strong stocks. So after few weeks of weakness, the breakouts from IBD 200 and Double Trouble will have the characteristics one looks for a near term weakness in strong trend.
- Interesting thing to watch would be the reason offered by market commentators and press for the drop. Very few would say the market just needed some rest.
Later : Buying exhaustion and selling exhaustion... and a book on technical analysis which will make you think differently.......