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2006-06-15 :: Bounce!

Yesterday was a good day for the market.  It ended up on the highs of the day, and this morning its opened up strongly again.

We are due for a bounce, particularly in the stocks that have been hit the hardest.  My gut feeling says that we should retrace a big portion of the decline in the broader markets before any waves of major selling pressure hit again.  However, there is this caveat:  when we decline as fast and hard as we have over the last month (it truly was historic in its speed and severtiy – much thanks to the computerized trading that dominates the market) the market has to eb and flow along the technical bottom, allowing buyers to send the market up a bit and latent sellers who missed a sale earlier to get out of a stock they have no conviciton in.  But eventually, once the eb and flow subsides, the retracement commences in earnest.  Given the fact that the market ended on a high note yesterday (something I mentioned a couple of weeks ago as being one of the positives I look for) as well as opening up today, maybe we are ready for the retracement.

More later!