One of the negatives about yesterday's rally is that it was started with good news on Chinese PMI and the U.S. ISM index. In general, strong rallies on no news are much better than rallies on good news.
The sentiment surveys all point towards lots of pessimism but the real money gauges like the put/call ratio, Rydex fund flows, and the VIX don't back up this high level of pessimism. I'll follow the real money gauges any day over the sentiment surveys. The VIX got up to 48 at the May bottom, 37 at the July bottom. It was only able to get up to 29 at this most recent bottom. I have rarely seen a sustainable bottom with the VIX only going to 29.
This rally looks like a sucker's rally to me and I believe odds are much higher that we go down the next 2 days than we go up. I expect us to sell off all day today and finish near the lows.
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Today, I can go for a sell off. :)
RYDEX data shows RYDEX traders positioned bearishly, which is bullish.
http://www.scribd.com/doc/36600523/Rydex-Report-for-8-30-10
mh ... bad call ... but funnily in next article changed to bullish view ? Isn't that a bit like roulette prediction. Isnt it more likely that markets will gap down tmrw because we went straight up from 1040 to 1090 with not great news ?!
Yea jam, we're that much further away from 101.50, eh?
Because a market goes up 2 days in a row, it doesn't necessarily have to gap down. So if we went straight up from 1040 to 1090 on great news, you would be more bullish here? I am not bullish, just saying that we're likely to get a pop on the nonfarm payrolls number.
@Petsy : it was close to 101.5 - right ? ... :-) ... and wtf are you not joining the chat ... man - don't be a sissy !!! cmon get over it !!!
@Market Owl : no my point is that ppl expected a down day yesterday (Thursday) and up day on Friday because of statistics and not by analyzing current market conditions. Markets going up on no news even Friday job # expected to be not so nice, makes me feel that some big boyz want to load off.
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