Chris Rowe

Is the Market Reversing?

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But it was a sell-off on light volume. This indicates that instead of heavy selling, thus pressuring the prices down, the buyers just stood out of the way temporarily and let the sellers do their thing. So, the buyers didn't exactly lose the battle. They just didn't really show up for it.

Recently, I said this oversold market is "like a spring that's very coiled, and the more coiled it becomes, the bigger the jump higher typically is." Well I saw what I needed to see, and this is your confirmation.

THE MARKET MAY BE DOWN, BUT OVERALL, IT'S STILL UP

What's really crazy is that the market is actually trading higher right under your noses! That's right. It's smoke-and-mirrors time! But we're sitting backstage and we see what's really happening.

This concept may be hard to grasp because of what you have been trained to think for ages. But the major indices that most people follow are just indicators. They don't always accurately reflect what's really happening in the stock market.

Since the low we just saw on July 15, 7% of stocks (net) on the NYSE have moved from sell signals to buy signals, and 6% (net) of Nasdaq (NASD) stocks have done the same. (When I say "net," I mean if 10% of stocks moved to sell signals and 17% moved to buy signals, then 7% net moved to buy signals.)

Without getting into too much detail, I'll make this very simple by painting a picture for you (OK, uploading a chart), and giving you the proof.

IT'S A CHALLENGING TIME TO BE BULLISH

One indicator that I follow, the Bullish Percent Index, does something that means the bulls have taken control for the time being. Don't get mixed up here, please. It is called an "indicator," but the reality is that it's not an indication of what will probably happen.