Second day of the rally attempt
Some folks have contacted us asking if it is a follow through day. We just want to say that today is just the second day of the rally attempt. So, we are just sitting on the sidelines still. We have seen many of these sharp rallies in the last 2 months and none of them proved to be sustainable in the intermediate term. We believe that there is no need to jump into the market right now considering that the indexes are below the 50 day and 200 day. We will be interested in this market only when the indexes atleast close above their 50 day. In the mean time, we will be happy to watch the action from the sidelines.
Everytime there was a follow through previously(in the last 2 years), our system showed a bunch of breakouts in the “Today’s Breakouts” section. But, today our Breakoutpickr system is not showing that many setups. This is another indication that there are not many stocks that are ready to breakout from clean bases. Bases take time to form and we just had a 10% (S&P from 1130 to almost 1010) decline on the indexes and there has been severe damage in the charts of the stocks. It takes time to repair.