The market x-ray March 13, 2012 –
Simple technical analysis often doesn't tell you that much. But it never is worth ignoring it. You always want to watch where the herd is going, even though sometimes where they've gone doesn't tell you where they're going next.
So we had a huge – or at least a strong one-sided down day- in which 95% of stocks were down. After that, as I told you at the time, you can expect a couple a days or even a week of bouncing back. I also said within a be able to tell a little bit by the quality of that bounce back. In fact, the fact is that there was any kind of a selling episode or correction didn't tell you anything. You've always got time to get one sooner or later. But the quality of the bounce back, that has the potential to be important indicator.
And just as expected, we got that bounce but it happened on much lower volume than the sell off. So, by itself that isn't really anything conclusive. Sometimes you just don't have a lot of people participating. But as you get to the level where selling has come in in the past, it starts to matter. Because if you start to get sellers without buyers, of course, prices go down.
Still, we're talking about human beings not mice or aunts. You never really know what they're going to do next. We talk about what is, not what we believe. If buying picked up on strong volume, which it could do at any time, it would get right back into the real trend – which nobody should forget that in the long run this year this spring is up.
