The wearin' o' the green
Just in time for St. Patrick's Day, today brought us a welcome sea of green (market heat map courtesy of finviz.com). There's also an important lesson here in having the courage of your convictions. After being wrong abut the reversal I just knew had to come, for two days in a row, by last night I just couldn't bring myself to call a bottom. I did mention though that every time I got the itch to throw in the towel and sell sell sell, that the market always reversed the next day.
And sure enough if that isn't exactly what happened today. That's the main reason I did not go short or sell everything yesterday. And now I'm so glad I didn't.
Moving on to the daily YM futures, we can see a classic parabolic swan dive ending with a big hammer (today's candle). Since it's now 1:40 AM, the rightmost candle is actually the overnight and look at how that's starting off. YM is up 0.81%. And ES is up even more - 0.87%.
This pop also takes us well above the right hand edge of the descending RTC established on March 9th. This is a bullish setup and there is only a 5% chance that this candle could be part of the downtrend. Today's G7 intervention in the yen and news of electric power becoming available to run the cooling pumps at the damaged reactors in Japan should help out stocks tomorrow. Like I said yesterday, it's the temperature in the reactors that's driving the market now.
Further good news is that the Dow broke above its daily pivot today and never looked back. And the VIX broke under its own pivot with a big gap-down at the open. The only downside at the moment is that tomorrow is a triple witching day and that can lead to lots of volatility.
It's too soon to say if today's gain was just a relief rally of the end of the recent downtrend. We need to see how next Monday plays out for that. At least unless some reactor vaporizes in a mushroom cloud tomorrow, I don't see much chance of another huge down day tomorrow like we've seen the past few days.
A political aside
The only other thing worth watching is our old friend oil. It's been drifting higher in the overnight. However, we seem to be back in a positive correlation between oil and the market, so that's not necessarily a bad sign. Hopefully we can look for some more stability in the Middle East because Col. Khadaffi seems to be on the verge of retaking control of Libya.
I can't say that I'm a big fan of Khadaffi, the man who sent one of his agents to bring down a Pan Am 747 in 1988, but I have no particular sympathy for his opponents either. I have no doubt that they are the same people who were cheering and dancing in the streets upon said agent's disgusting return to Libya in 2009 as some sort of national hero after being released by the craven Scots on "medical grounds", and where he underwent a miraculous recovery from his supposedly terminal condition.
I don't think it's as important who runs Libya as long as they stop fighting. Assuming the UN continues sitting on its hands over the proposed no-fly zone and President Nerobama continues fiddling with his basketball brackets while the world burns, Khadaffi might have the time he needs to get back in the driver's seat over there.
No trades today but with the VIX back under 30, I'm back from my short vacation. I stuck with my Ford play through its dip yesterday. OMEX meanwhile seems to be diving like its Zeus underwater robot. It's nearing some longer term support around today's close of 2.33 so I'll just keep watching it.
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