The Bear Case And The Bull Case: Part 2

In Part 1 I made the bear case and the following is the bull case
  1. The turn of the month from March to April is one of the seasonally strongest times of the year. 
  2. In the past two weeks the market has gone sideways and worked off the short term overbought reading setting up for a continued move higher.

  3. According to most surveys hedge funds are pretty long heading into quarter end as are mutual funds. The powers that be would be very happy with a strong end to the quarter. 
  4. 1150 on the S&P 500 is very strong support and is not that far away.


Anonymous said...

Good stuff as usual Tsachy.

If I could add my 2 cents.

Looking @ your 10 dma it appears they usually go from overbought to oversold. They won't just hit the red line and move higher. Meaning I think we continue sideways or lower for the next few days.

Also, My view of the s&p is that there is more support around 1136-40...not so much the 1150 mark. Thats just what I see.

Good luck.

Anonymous said...

I don't consider the 1150 as strong support. The position of it to where the market has recently been suggests it's a weak support area.

Onlooker said...

Don't be so sure that the AD 10 MA has to come down to oversold territory. With the very strong RSI into the peak, and the strong summation index, AD, NYHL, and some other measures, we could see a situation similar to Aug or Sep.

Not saying it will happen that way, but bears have to consider that and I think that shorts are going to be hard to profit from on whatever dip we get here.

I don't know why, but this market still wants to go up, and I'm not arguing with it or standing in the way of the freight train.

PJ said...

As a bear I have a bad feeling about this week ... The first positive payroll print of the recovery is big news and a "buy the rumor, sell the news" attitude will mean buying this week, selling next ... The bulk of the bad economic news is still 2-10 months away. ... Market has risen into earnings season in recent quarters, that might also stimulate retail buying.