Monday, October 22, 2007

One Horseman Gets Push

Monday's market opened down but that was about it. After last Friday's big down move, the bulls felt they could now buy stocks because the selloff is behind us. Well, the proof for that statement can only come when the Dow goes above the last peak it made. Until then, we think the next big move is down.

This, in spite of the news from AAPL after the close that their earnings were huge. So, here we are again with the four horsemen bringing us the big moves. The strength of these four stocks is not being exhibited in the broader market. Yes, there are some days when the weak stocks make moves but it could be that those moves are generated by shorts being covered.

This evening we see a little bounce in progress but the move could be over right after the market opens on Tuesday. We know that the players are extremely bullish which by itself is more than a little bearish for us contrarians. When so many are bullish, there is reason to be nervous but the confidence is thick.

We will be back tomorrow.

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