9 JUL 2009, Thursday

1. Interesting...in the recent stock market pullback, bearish sentiment has raced to it's highest level since the March bottom. Other indicators are getting short term oversold as well. Perhaps we might get another push upward. The question is how much? Back toward the recent highs and fail or breakout above? The 55% bears area has been associated with bottoms in the past. It can be either a short term bounce or a long term move and that is why it's important to watch subsequent price action for clues.
2. Per normal, Ms. Market does everything that she can to hurt the most people. And, she is making it very confusing since the end of May...a little something for both the bulls and the bears. Which side is she setting up for the longer term slam? Don't know...day by day...but I've got my ideas.
3. As I've said, we are in a long term bear market. A guide for that is the 60 week moving average that you can find on the weekly charts. Above it, long term bull...below, long term bear. NOTE: It's a guide, not an answer. You can also use it as guide when you get really extended away from it...possible corrective return move toward it pending.
4. I'd like to see the push a little higher so I can establish shorts at better prices...but will be trading both sides, as necessary, until this sorts itself out. Short term, I watch the 30 & 60 day moving averages as guides on the daily chart. When I'm bullish, I'll be looking to buy weakness as prices retrace toward them. And when I'm bearish, I'll be looking to sell strength as prices retrace toward them.