Bullish high volume reversal

Ok. Tuesday's post was 25 points off, but as a tactical move, that just helped the capitulation panic.
Tuesday's closing TRIN was a panic 4.47.
Sentimentrader's Bearish sentiment was over 90% Tuesday night.
Tomorrow has the Jobless Claims and Friday has the Unemployment report.
I don't know if the idled 4,000 FAA workers and the 70,000 construction workers will be included in any of those reports yet.
If it were not for the economy, I'd be more certain that today's high volume reversal was the bottom for a while, like July 2010.
Compare both RSI 12 readings too.
Of course you could say today was just a back-kiss of the March-June bottoms line.
But I'm impressed with the big volume today which indicates capitulation, a "Shedding Holders" Pattern according to Spielchekr.

Note also the Dec. 7th candle top was the highest volume in over a year...and right at today's low.

We are getting oversold and heading to the last line in the sand.
The flaring Bollinger Bands could point the direction for some time to come.
Looks like traders must love the budget deal.
Bulls best hope might be a high volume candle down to 1260 area with a long tail reversal with sentiment dropping like a rock. (similar to July 2010)
Last week we couldn't get TRIN much over 1.5. It is starting to move up a bit now.
http://stockcharts.com/c-sc/sc?s=$SPX&p=D&yr=1&mn=2&dy=0&i=p06542932500&a=94546561&r=6970.png

Edited by Rogerdodger, 03 August 2011 - 11:25 PM.

cisco laied off 10k , should be part of the initial claim , the number won't be good , i believe.

sp might downgrade US debt, the world is watching it .... will cause some churn 2

cisco laied off 10k , should be part of the initial claim ,

the number won't be good , i believe.

The market is no doubt expecting bad news.
I think today showed it's inoculated.

Today's jobs news...
Challenger Job-Cut Report
Company news is seeing a noticeable upturn in layoff announcements, measured in July by Challenger whose count shows 66,414 vs 41,432 in June and vs 41,676 in July last year. The latest count is the highest since March last year. The report warns that the majority of the layoffs came from major employers in bellwether industries -- Merck, Borders, Cisco, Lockheed, Boston Scientific. July aside, the reports stresses that job cuts over the last year have been extremely low.

ADP Employment Report
ADP estimates private payrolls rose 114,000 in July.

Tomorrow:
Monster Employment Index
6:00 AM ET

Jobless Claims
8:30 AM ET

Friday:
Employment Situation
8:30 AM ET

Edited by Rogerdodger, 03 August 2011 - 11:44 PM.

Roger, check out $TED and $CPCE, while $TED is finally breaking out, $CPCE is only in a bounce territory compared to the recent lows. The prices though could not even get back into the BB and this won't happen with a U-turn, it will continue to decline less intensely. I think any bounce tomorrow is a sell, the market may really crap out on nfp.

many chart reading players got snookered yesterday hence the high volume...then the big guys reversed it// I would not be quick to assume IT bottom given one day's trade

Jobless Claims
Highlights
Based on jobless claims, the jobs market is improving.
Initial claims were little changed in the July 30 week, right at the 400,000 level

(prior week revised 3,000 higher to 401,000).
--NO WAY! REVISED HIGHER...AGAIN? --

The four-week average is down for the fifth straight week, 6,750 lower to a 407,750 level that is roughly 20,000 lower from a month-ago in a comparison that points to badly needed improvement for tomorrow's employment report.

Continuing claims rose 10,000 in data for the July 23 week to 3.730 million. The four-week average, which is also at 3.730 million, is little changed from the month-ago comparison. The unemployment rate for insured workers is unchanged for the seventh straight week at 3.0 percent.

The government cites no special factors in this report which may be a surprise given questions over the government shutdown in Minnesota, seasonal retooling in the auto sector, and the partial shutdown of the Federal Aviation Administration.
These questions aside, today's report is right in line with expectations and should have little effect on today's financial markets.




"The government cites no special factors in this report which may be a surprise given questions over the government shutdown in Minnesota, seasonal retooling in the auto sector, and the partial shutdown of the Federal Aviation Administration.
SO ARE THEY JUST "FORGETTING" TO ADD THOSE UNEMPLOYED WORKERS THIS WEEK SO THEY CAN SLIP IT IN NEXT TIME, after the fact?
I know. I'm bad for even asking the question. I'll be the first in line for "re-training" when they start that.

Edited by Rogerdodger, 04 August 2011 - 11:19 AM.

Market only goes higher these days on LIGHTER VOLUME... with notable exceptions like 5/31

I caution those getting long here. It'd be tempting, I have to admit, if I wasnt an options trader. So for me, not much opportunity here except to sell puts if you think we're goin higher...buying calls is a lose lose with the VIX where it is. In any case, sure we may get a short term bounce....i mean we already have, and its probably not done. But unless your time frame is pretty short dated, ie a few days. We violated the 50% fib fan support line from last summers lows yesterday intraday, that was a warning shot as to what was next. Today we completely blew through it , AGAIN, and even took out a key fib level at 1227/1228. It might not happen today, tomorrow or even next week, but this markets going down to the .618 fan line from last years lows at some point, and if that happens before September, that support doesnt come in until we get below 1200. In my opinion, this markets breaking, bouncing, and then re-breaking fib fan supports a lot like it did in 2008. Thats not a fear mongering comment, its just pointing out a reliable technical indicator that is telling us that the market will see lower lows in 2011 than where we have been today. You can trade the bounces, but the "tell" if you will, is the violation of these key support lines, instead of sharp, high volume reversals or double bottoms that we should be seeing if the market was headed significantly higher in the medium-long term.