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The Bounce Goes Boing!

Thursday, July 13, 2006 | 02:20 PM

in Investing | Markets | Psychology/Sentiment | Technical Analysis | Trading

I spoke with TheStreet.com's Liz Rappaport yesterday about the markets; she very much captured my perspective:

"The bounce [from the June lows] has run out of steam," says RealMoney.com contributor Barry Ritholtz, chief market strategist of Ritholtz Research and Analytics and president of Ritholtz Capital Partners, a New York-based hedge fund.

After losing 7.6% from its peak on May 9, the S&P 500 had bounced back 5% through the end of last week from its June 13 low of 1223.69. Ritholtz believes that bounce has run its course and a retest of the major indicies' June 13 lows may now be in order. The S&P and the Dow are still up 2.8% from their respective June lows while the Nasdaq is only up 0.85% from its June lows.

A successful retest of those levels -- of about 10,706 for the Dow, 1224 for the S&P and 2072.50 for the Comp -- is the most likely scenario, but is certainly not guaranteed. A hint of a more serious decline (and bear market) could be seen Wednesday as many exchange traded funds and indices broke through their 200-day moving averages."

Note that the Nazz JUNE 13 intraday low of 2067 is about where we are this moment.

If there is going to be a bounce in the QQQQs, this would be where it should happen from . . .

UPDATE: July 13, 2006 2:24 pm

Glad to see that Dick Arms TRIN index see sthe same thing

Selling's Overdone
7/13/2006 2:21 PM EDT
I think they have overdone the selling on the news out of Israel, and I am in the process of contacting my more aggressive institutions and telling them to do some buying. Based on my index, the TRIN, I am suggesting going against the crowd. I'll have more specifics in my column Friday morning.

Source:
Bounce Takes a Header
Liz Rappaport
TheStreet.com, 7/12/2006 6:06 PM EDT
http://www.thestreet.com/_tscrss/markets/marketfeatures/10296463.html

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Comments

...and let's not forget that when the fed stops the markets usually go down. and as of yet I don't think we've seen any significant selling on the part of retail buy and hold 401k types, and at some point, those ugly memories of 2000-2003 are going to start hitting them, and they will, if things get much worse.

Posted by: Bob A | Jul 13, 2006 2:45:59 PM

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