Thursday, July 26, 2012

July 26, 2012 Postmarket

If you're bearish:  Ouch.

Draghi spoke, and the markets evidently still listened, even though all logic and reason should suggest that the euro should logically go down when the ECB and similar agents speak, since the only viable solution they would have to their problems is printing more euros.

FB tanked during the day today, beat expectations, and was soaring in the early going after-hours.  Then it proceeded to give back AH gains of 8%, and is now down an additional 8% on top of what it was down in market hours.


We broke above the black line, but why?  One possibility is that the bull counts are back in play; another possibility is simply that the SPX futures need to reclaim the gap at ES ~1358.55 and that that required a more substantial correction.  Maybe $VIX needed to fill its gap.

If this is a new up move, we should probably expect a wave 4 consolidation (though it may be yet another A, B, C of A, which would cause a lot of headaches, especially if the B is a deep retrace).

Still:
  • Daily CCI hasn't yet hit oversold
  • Daily full stochastics haven't yet hit oversold
  • Daily MACD is still above zero
  • The $RUT and $COMPQ did not rally as vigorously as the S&P 500 did, in spite of the $RUT being oversold daily stochastics.  The $DJIA had the most vigorous rally - i.e. it was led by the large-cap "defensive" stocks for some reason.