(By Rich Bieglmeier) It was another day when the market lifts off to start the day, only to be stuffed back in the box by sellers. At some point, bulls are going to get tired of getting shoved by bears and push back. Can't a cat bounce a little?
The market could continue to head lower before a snap back. As it stands now, 82% of the stocks on the NYSE are trading under their 10-day moving average. Add another 180 and it hits 90%, a sure fire sign it's time to buck up for a short term rebound.
The Dow, NASDAQ, and S&P are all trading near relative strength readings of 30, another sign a bottom is near. The one thing that's missing is the belch down day when everything gets crushed on high volume. A trading day like that will likely mark the short-term bottom. As odd as it sounds, I think it was the famous money manager, Mark Mobius who said something like, "when the thought of getting in the market makes you want to vomit, that's probably the best time to get in." Feeling queasy yet?
[Related -Monitoring The Trend In Treasury Yields With Moving Averages]
However, a 22.27 VIX reading does not spell fear. Despite the drop, investors are still somewhat complacent. We would like to see a number in the 30s and investors freaked out like a five-year old in a haunted house. Then, most would have that Mobius feeling in the gut.
Even if stocks do show some signs of life, the breakdown points of 2900, 1340, and 12,700 for the NASDAQ, S&P, and Dow respectively, should act as a lid on the way up.
For now, iStock is eyeballing the number of NYSE companies under the 10-day moving average, RSI readings, and the VIX. If all three can get to it's time to get back in scores, then we'll be buying stocks near the bottom while everybody else is panicking to get out.
How does that sound?
[Related -In Denial: We Pursue Endless Growth At Our Peril]
The last few weeks have been sort of like a hangover, you feel rotten all curled up in the fetal position, swearing to God and yourself "you'll never do that again." The sooner you get it out of you, the sooner you feel better.
Maybe's the jobless claims numbers can be the finger down the throat that gets us the down day to end the correction. Wall Street expects 365,000 new claims. A result around 385k could get it done, 390 will do it for sure.
If that's followed up by a Philadelphia Fed announcement that's below expectations, the refresh button can be set by Monday morning. It's horrible to root for bad news, sort of like betting the don't come line, but iStock has had about enough of the market crapping out.
We'll be back tomorrow with an update off all of Thursday's action and the state of our trade of the week.
Let us know what you think, write to me at Rich at wallsttools dot com.