Bulls In Charge Says Market Timer Frank Kollar
April 3, 2009 (FinancialWire) (By Frank Kollar)
The S&P 500 Index (SPX) is now up 20% from its March 6 bear market lows. The Nasdaq 100 Index (NDX) is ahead 19.6%.
The market is sensing that the bad news has been figured in, and though it might be awhile before the economy actually turns higher, the economic lows are behind us.
Over the past three weeks we have had five trading days of better than 9 to 1, up vs. down volume. These are bullish indicators, especially if there is more than one such day in a short time span. These breadth surges were also unusually strong. 27 to 1 on March 10 and 19 to 1 on March 12, a 10 to 1 on March 17 and a powerful 31 to 1 on Tuesday March 24. On Thursday April 2, the NYSE had a 10 to 1 up vs. down day.
We have no record of five such trading days in a row. The 1982 bull market started with just two.
According to Elliott Wave Theory, we appear to have just completed a Wave 5 on March 9. Wave 5’s are usually the bottom of a series of waves to the downside. This forecasts an entirely new sequence of waves to the upside ahead.
Sentiment, using the CBOE Volatility Index (VIX), still shows skepticism closing at 42.04 on Thursday, April 2. Levels over 40 used to forecast a bear market low. Of course we have been at high levels since November 2008, but still, holding over 40 on the VIX shows a healthy dose of skepticism. The market climbs a wall of worry, so a high VIX is positive for continued gains.
Kollar is editor and chief analyst at FibTimer.com (http://www.fibtimer.com) which offers market timing strategies for S&P and Nasdaq index fund traders, as well as bond, gold, small cap, sector, ETF and stock trading strategies.
Kollar’s research has shown that the financial markets are in tradable trends approximately 80 percent of the time. FibTimer strategies define trends and trade them in both advancing and declining markets. Caring nothing about what newscasters say or what the latest economic indicator predicts, trends are where the profits are, and that is where FibTimer is.
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