I for one appreciate your summaries on these issues due to the fact that I do not have the depth of knowledge that you do in these areas, and do not pretend to be a paper champion like so many who read a few things then start challenging you. That is generally embarassing to the challengers.
I have openly written in my blog that I do not believe we have seen the low in stocks based on my ongoing analysis of the COT report and what the big money has been doing. I also wrote in there for anybody who read it, that the rally in stocks would start March 13th or within a few days of that, I wrote this at the end of Feb and again at the very beginning of March.
I do not like being in agreement with so many amateurs who think we are going way lower, but my analysis is what it is, 5500 appears to be a fair value for the Dow and a good place to start buying for long term hold purposes. Commercials are selling this rally which has historically led to selloffs and rallies failing.
You are right about the reversion from extended moves. My research has told me over the years that often when you get an extended move in one direction, you actually should initially go with it because it is an underlying sign of strength. When the reversion takes place, it rarely overshoots in the opposite direction. Comments like that are made by people with no real experience with real money at stakes in these swings. It is merely a possibility not a probability. That is not to say it cannot happen, but it is not a high probability. Often the retracements are sharp and short, again markets will defy the masses. Even in the commodities markets with the massive reversals we had, they have not overcorrected by anywhere near the same degree they rose. What everyone waits for rarely happens. I do sense the masses buying the media hype about this rally, that is not good. My sentiment indicators are over 70 now which is bearish and are rising almost daily.
Cramer may have had his moments in the past but he has not been very good recently when I have come across his comments. He is just way too emotional to trade well.
Also, I hear all this crap about markets rising on increasing volume being bullish etc. If you study this in detail you will find there is no such correlation at all. I have no idea how so many smart peoople have been suckered into that notion.
