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Thursday, October 16, 2008

The Onslaught Continues

The market dived shortly after the open, the VIX spiked up to 82, and the SPX is now bouncing up off 865. The good news is that the previous low has not been undercut (the Nasdaq 100 came close, but I don 't think that is one of the indexes that counts), so the rally attempt is still intact. The market got a lot of confidence from Bernanke yesterday, who said we are nowhere near close to a recovery. Wait a minute, you guys have been telling us the economy is fine ("booming" to quote Luskin), what's all this about a "recovery"?

Helathcare is again the strong sector, and surprisingly, consumer staples (XLP) the weakest. I guess it's just it's turn in the barrel. As I write, energy (XLE) is moving up faster than the other sectors. XAU, gold and silver, is getting crushed.

I am seeing stocks at prices I didn't think possible. AUY, GSI, ARTW are all below 5, AEHR, CPSL, AMOT are under 3. Just incredible.

Now that we are in earnings season again, i am going to have to stay on top of the earnings spreadsheet, especially the reporting dates. I will try to get as much advance notice as I can.

Again there are no breakouts going. I think I may be on to something with the relative strength scan I did last week. I am going to do some more, experimenting with the parameters to see what kind of results I get. You can wait for leadership to show up, which means you will miss a substantial portion of the move up, or you can try to anticipate where the strength will be. If we start a rally, that is what I will attempt to do.

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