I think we may have had some capitulation by the bulls over the last two days. Or more specifically during yesterday afternoon and this morning. This morning people were dumping stocks indiscriminately. Even stocks that had good earnings news were down 5 to 10% this morning. And that's after selling off before the earnings news hit. It certainly felt like people were just throwing in the towel. Buyers stepped up around eleven to scoop up all the bargains and caused a sharp reversal. I'm still not thrilled with the look of the indices, especially not with yesterday's long dark candles. However, I'm still seeing plenty of stocks that are in good buying positions. I'll be looking to scoop up a few names if and when they confirm today's moves.
You may want to take a look at The Big Picture's post about the current technical picture and the inverse head & shoulders patterns in the indices. I always get worried when everybody sees what I see in the charts. And it seems like everybody is watching that neckline. Oh well, what are you gonna do? :-)
