Each day is a new day…

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Back in the ’70s we used to frequent Tasajara Zen Center.  One day there trying to talk the gate guard into something he countered our arguments by mouthing the very true and very easily mouthed zen saying, Each day is a new day.  We wanted to kill him at the time, but when you think about it, it’s true.

Monday was a day which should have broken the back of the rally.  But it evidently didn’t.  Waiting for several days to discern a signal is probably always good practice, and in this case it looks like the sharp sell off did nothing but extend the trading range shown here.

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In the end the extension of the trading range in time and range will give it greater significance.  We have remarked how extraordinarily treacherous signals are in the market right now.  Evidence the little head and shoulders which appeared confirmed (almost) and then turned out to be a false pattern.

If we had any shorts on right now we would hold them until price cleared the last high by 2%.  The present pattern is either a reversal or a continuation.  At the moment we would bet on reversal partly because of the maturity of the rally, and partly because of the resistance from 2000 hanging overhead.

In the meantime, in answer to your question, no this is not a bull market.  It is a bear market rally in late stages and these are difficult and dangerous.

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