A Rally Without Steam

This trader sees as I see, a commentary from him on Friday during trading hours:


"Floyd:

With your commentary in today's alert of the market potentially making 12,000 I tend to agree and here is why.

1. Technically, Dow 12,000 should coincide with a Vix trendline and a short term trend reversal to the downside but a continuation of the overall market trend up until September.

2. Psychologically speaking, "everything is great," bailout city, USD rising, oil falling, but we all know nothing has changed. Gas is still $3.50 a gallon and inflation is still rising eroding profits and buying power. Foreclosures are rising and home values are falling, so if banks are repo'ing homes they are worth even less than they were when they take possession. It's like a dog chewing on his own leg.

Just looking at a 6 month vix chart it is easy to see the trend and reversal points, both intermediate and major points.

Major Market bottom March 17
Major Market top May 17
Major Market bottom July 16
Next intermediate top August next week 15th or 16th.
Next Major top September

If all goes according to the cycles of manipulation....

Needless to say, I didn't enter yesterday after the pullback or this morning.

Hey but what do I know, I'm just a dumb ass structural engineer......:) You're the expert.....

Cheers"

And conversely, from Mike Gibbons:
"The NASDAQ Composite index closed above its 200 day moving average on Thursday and we are now declaring the NASDAQ to be in a confirmed rally. The NASDAQ index has risen 13% from its July low and some would say that we should have called the confirmed rally sooner but our market model, backtested to the opening of the NASDAQ exchange in 1984, stubbornly refuses to believe a rally has legs unless the index is above the 200 dma level. Additionally, the model also requires that the day of confirmation should be an accumulation day (which Thursday was not) but we are overriding the model on this occasion as we think there are sufficient reasons to do so:

This was the fifth consecutive positive week for the index.

The index is trading between the 1 and 2 standard deviation Bollinger Bands indicating strength but that it is not yet over extended.

The average volume trend is up although we would have liked to see volume this week at or above the moving average.

Oil has fallen 23% from its July 11 high which will lift consumer confidence and a rising dollar will continue to lower inflationary pressure.

And, from Floyd:

The market went back to the 11,750 area Friday, before falling. It's likely for another upsurge attempt, to our Dow projections, but we believe the entire rally short term, and without enough steam. Nothing is really any better. No news or events are truly positive enough, with true scrutiny, to hold the upside long term....so far.

We have our first buy in to the put, and will continue to recommend tight profit taking to the call upside potential.