Friday, February 27, 2004

The action today is not encouraging from the long side.  While a few of our intraday indicators had become overbought (see the link for the charts to the right), in the past this wouldn't have meant much.  I've been harping on the fact that we need to watch how the market reacts to short-term oversold readings to see if perhaps the larger trend is changing, and this is the type of sign we would normally see if it is.  The action in the semi stocks is particularly bad given the level of pessimism already seen there.  I still don't want to be heavily short as long as we're above the week's lows, and we have some consistently positive seasonality over the next few days, but this type of labored upside is not what is typically seen in uptrending markets. 11:43:42 AM