Ander's Market Theories

[AnderL]

Dow is under pressure from CAT and has been dragging on the markets today. If it wasn't for CAT I'm sure this would have been a strong rally rather than a consolidation day. People are still bearish the markets and continue to short or hold short positions from much higher. That requires less buying support as price creeps higher on them.

The Fed injection was good today and is usually serviced in the late afternoon.

NDX and COMPQ are outperforming the other markets by a long shot. Every sell off generated across the rest of the markets is not meet on techs. They seem to be holding their gains with each drive. It wouldn't seem strange if it was just buying support but the volatility is just not there. Did the bears forget about technology stocks? They very well may have as the energy related industries were the high flyers and would have been the ripest for short selling. Take into account the heavy weight energy stocks have on the S&P and Dow and there you have it -- pressure. With the advent of hedging and how popular it has become among common investors I think the markets are ripe for a short squeeze. Similar to the 90s when everyone with quitting their job to be a daytraders. Shorting was quite popular back then and this kind of action really holds markets break strong resistance.

I'm holding my UOPIX over a second weekend. I like my 21.55 entry and with the way volatility has been unless I made a purchase every day of this week I would have barely improved my entry or run the risk of averaging in higher.

The NDX has a nice intraday ascending triangle that it has held over the last 2 days. If the other markets continue to underperform it next week may see some increase in money flow into the NASDAQ equities and prop up the NDX and COMPQ.

I still don't trust the action on the down side here as the break of long term trendlines panicked the markets. But the action over the last 2 weeks has shown a rather disconnected bottom forming with indicator divergence on underperforming markets and a hold of rising support on the stronger small cap and technology markets.

I'll see what happens next week as we should see funds get some capital infusion.

After the market closes I will post a reply with UOPIX and USPIX charts along with current gains.