Cautiously optimist
Yesterday does not count as follow through day on IBD system, only a follow through day of 1.7% after 4 to 7 days after a rally attempt is valid breakout. The IBD Big Picture is also skeptical of this rally attempt. Unlike that last time it was screaming, buy, buy, buy during correction. The Big Picture read of the market is one of the best read I have seen on the street. It is seldom wrong in its overall readings.
From IBD Big Picture
Wednesday's price gain was one of the biggest of the year for the Nasdaq, an encouraging sign. But one big day doesn't mean much in the grander scheme. The Nasdaq's nine biggest up days of all time all occurred during the bear market of 2000 to 2003.
More recently, the Nasdaq's biggest up day of this year came on Nov. 13 — right before the market started a new leg down.
For now, consider Wednesday to be Day 2 of a rally attempt by the major indexes. We'll need to see more signs of strength among both the broad indexes and leading stocks before the market can take on a more bullish hue.
What it means in my scheme of things is light commitments and very low 5 to 10% profit targets on all methods.
4 comments:
I agree, the Big Picture is a MUST READ for any speculator. I'm wondering what the leadin sectors are going to be for the next move (whenever that happens).
It did say that yesterday, but today's Big Picture now says we're in a confirmed rally. I find this a bit suspicious that the flip-flopped just like that.
The noted the strong performance of their own proprietary indexes:
"IBD analyzes its proprietary indexes every day to help track the action of the stock market. Though we haven't formally used them to signal follow-throughs before, they greatly contribute to our understanding of the market's health, day in and day out."
So, now, yesterday's strong move was a follow-through in their minds. I am still skeptical, this correction began only three weeks ago today.
Pradeep, does Market Monitor agree with IBD that we are in a confirmed rally now?
Is it perhaps too early to be buying now?
thanks
No.
What to buy and when depends on what kind of stocks. For value investors last month was best period to buy, so Market Monitor signal primarily refers to Double Trouble, IBD 200 and EP.
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