sometimes i kick myself

If you saw in my previous intraday comment, I watched as price fell to the centerline and bounced aggressively from there.  Unfortunately I did not act on the reaction and spent the rest of the day watching price rocket up.  In fact, from this bottom to the close … the Russell 2000 gained 2.6%, even though for the day it closed down 0.20%.  An amazing move.

Today was a very strong move, where all indexes fell pretty hard in the morning hours and then spent the rest of the day climbing.  This sends a loud signal that the buyers stepped in and did not want the price to fall any lower.

I think there were a lot of traders sitting on the sidelines over the past week waiting for a good pullback to be able to get in at a cheaper price and today offered that.

Volume was very strong today, which further confirms the bullish move.

Today was in fact the first day in roughly a week where I felt good about the next few weeks … we might go up from here after all.  I would like to see a gap open to push me over to the bullish side.

My end of day analysis is still mixed, although leaning more toward the bullish side than previous.

A few things that bother me …

I have a proprietary indicator which I have coined the “fear index” that is VERY accurate at predicting future movement usually 1 – 3 days in advance and it is not confirming the bullish movement.  In fact, it pushed lower today while prices pushed higher … definitely troubling to me.

The vix again closed up today … which usually coincides with a falling market.  What this is telling me is that in the options markets traders are preparing for a down move even though one has not appeared.  These traders could be wrong, but this anomaly usually doesn’t occur.

The Russell and Nasdaq had a strong move, but were not able to make a new high today.  So although we did not have damage, we did not technically make progress.  The SP-500 did make a new high, but all indexes ideally need to confirm the move.

An opening gap tomorrow OR strong move intraday should remove my concerns … but otherwise we stay firmly entrenched in our trading range making little progress over the past month.