Looking For ‘Real’ Buying

Another good whacking for the market. But buyers showed they can still move the ball as they erased most of the day’s losses with an afternoon rally.

This gives traders yet another look that the market might bounce.

That’s not to say we’re shifting the Sell Bias we’ve held steady for weeks. Far from it.

Should Tuesday’s low stick, we’ll begin looking for a Follow Through Day next week, where volume stronger than previous day’s accompanying at least one of the major indexes up about 2% would suggest institutions are on board for higher ground.

We wait at least four days to give shorts time to cover positions, so as not to confuse it with real buying.

As long as unrest over Europe’s solvency concerns persists we expect volatility to be the norm. Potential war in Korea also has the world on edge, as does BP’s fiasco in the Gulf… but it’s best to let the market do the talking and trade “what is” rather than “what should be.”

Positive closes Tuesday for the key sectors of semiconductors (SMH), financials (XLF) and retail (XRT) bode well for the bounce.

We’ve nibbled a bit on the Long side. We’ll need further confirmation to take larger positions.

Another weak bounce would set us up to enter shorts again.

Best,

Dan

thegrowthstockreport.com

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