Tuesday after market close August 9, 2011
Yesterday we opined that an extreme had been made with maximum and whopping 11 Billion shares traded on the NYS. This turned out to be the case. Richard Arms, creator of the Arms Index, is a fan of the last half hour action. Take a look at this chart of the Dow, notice the volume spikes at the end of the day.From the intraday low the Dow Industrials had a roughly 600 point rally the last hour and fifteen minutes.
We put ten days on this chart to show you that the pros wait for the last hour to make their decisions. And look a the stunning rally, counting as 429 from the previous day's close. So markets tried the bottom one more time, a brief overthrow occurred and boom the fourth wave rally we suspected this morning is under way, our apologies to Peggy Lee......
TLT Ten minute chart
In the last hour of trading TLT registered an intraday low of 103, soared to 109, then collapsed back to our sale price on the close yesterday of roughly 105+. Wow! Part of our mission here is educational. We are showing you the ten minute chart to hopefully dissuade you of the notion that one can be expert at intraday trading. If that was the case, in one year traders would become rich and retire to yachts in Monaco Harbor.
At the top of the forthcoming fourth wave we expect to buy TLT again at a lower price anticipating a rally to the very bottom of the fifth wave in stocks.
NASD Summation Index
Despite the rally, using last summer as a ruler, one can see we have some work to do before the bottom is in. We continue to believe this is a fourth wave bounce; one can see looking at last summer that bottoming is a process not a one day event.
Trader Perspective - Note that the NASD Summation Index had to make a higher low before the QQQ got its legs and really rallied last summer. Expect no less this time.
I am making my buy list up now and will share it with you tomorrow morning. Like any good TV or Saturday matinee serial, we need to plant some seeds to get readers to stay tuned (think, who shot JR?)
Seriously the bottoming process continues we will show you a list of oversold candidates most of which pay fat dividends, let's get paid for waiting, that merit your attention.
thanks for reading TMP The Market Perspective
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