Shares rallied sharply Monday and Tuesday and various Actual Cash subscribers emailed me asking whether or not it was time to maneuver again into shares.
The query is comprehensible as I’ve been recommending a defensive stance since again in December 2021.
I penned an extended piece on Monday outlining lots of the instruments that technical analysts search for in attempting to time a market backside. Regardless of a two-day burst of shopping for maybe pinned on hopes of a shift (i.e. pivot) by the Fed, I’m not moved to declare that the bear market is over.
If merchants felt that Monday was the beginning of one thing bullish and sturdy, I doubt that the market would commerce off within the final 90 minutes of buying and selling on Monday. An actual low would have seen costs shut on the excessive of the day.
Costs have been oversold and susceptible to a rebound. On this day by day Japanese candlestick chart of the S&P 500, beneath, we will see that the candles don’t present us a bottom-reversal sample. Buying and selling quantity didn’t surge strongly and the On-Stability-Quantity (OBV) line remains to be pointed down.
Backside-line technique: I might be lifeless flawed, however I anticipate a greater shopping for alternative later within the fourth quarter.