I have time on my
hands (Pandemic Ponderings) so here’s a look at some specific Friday’s numbers.
There are some signs when corrections end. As the Price
falls, we like to see volume fall. Otherwise, if volume is increasing, the
bottom can be inferred to be farther away, because selling pressure is
increasing. Volume doesn’t always go in
a straight line, so the signals can get confusing. Friday, we made a lower low and volume
dropped about 1/3 compared to the prior low. That’s a good sign for the Bulls.
There was also a slight improvement in Breadth (% of stocks advancing on the
NYSE) and that’s another good sign. It was not enough to convince me to Buy,
but these calls are almost impossible to make when the pullback is as small as we have
seen so far. Small pullbacks give small signals.
Friday, the S&P 500 stopped at the 50-day moving
average (50-dMA). If one draws a line from the Coronavirus low thru the low of 30
October, to establish a Trendline, we note that Friday’s close was also on the
lower trendline.
While I posted a chart showing potential for a significant
correction, it is also possible that the Markets will bounce higher.
I think we move lower, but we’ll have to wait and see.
