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Wednesday, May 7, 2008

The Roof, The Roof, The Roof Is On Fire

Starting just after 1pm, the big boys came back from lunch with their expensive girlfriends and startyed selling, and for most of the rest of the day it was relentless. 1406 tried valiantly to hold, but the entire support zone from 1396-1406 got crushed. Volume was relatively low (preliminary figures from I have seen them revised later) so today should not be a distribution day, howeveer I am out of the distribution day calling business, I'll wait for IBD tomorrow.

The Nasdaq easily qualifies as the volume was higher than yesterday, but again, I'll let IBD make the call.
Speaking of IBD, they have an article on the front page singing the praises of Ben Bernanke for "engineering" a bottom in the market. It's funny how the market can make bottom callers look like fools. And why is it that when the taxpayers help out poor people, we scream "socialism", but when they help out rich people, it is "creative financing"? Anyway, that article has me convinced that there is still another shoe to drop, sometime this summer or fall.

One of Bernanke's responsibilities is keeping volatility under control, and he has done a good job of that, reversing an uptrend in the VIX that beganover a year ago. Don't look now, but that MACD is starting to loo a little ominous.

We don't need no water, we got the Fed.

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