Tuesday, March 25, 2008

Market Monitor is Bullish

After today's trading, my main Market Monitor scan has turned bullish again. It last did this during the last week of February and remained bullish for only four days before turning back to a bearish ratio. As it turned out, that turned out to be a good shorting opportunity. As long as this ratio remains bullish, I will look for longs. If it reverses quickly like last month, then I think that will be a clear signal that this was just another short-covering rally. There were many similarities between now and then - it was the end of the month, indexes rallied up to their 50 day moving averages, stocks that looked good started to pop up slowly. I do think things look a little better today than they did then - we have tested the lows, the indexes are above their 50 day moving averages(although barely), and there are more charts that are decent, although still not a lot. Since this turned today, I have a little more confidence in taking longs here, and will use this to tell me if this rally has a chance to be longer than I thought. If we reverse back in the next few days like last time, I will let you know.

You can learn more about the Market Monitor here at Pradeep Bonde's website. My scans are similar to his but he is certainly the expert of this indicator. If you haven't done so already, make sure to check his site out - it's full of great tips and original trading strategies.

1 comment:

Richard said...

Market Indicator, eh? I'll definately have to look into this. Keep up the great work, I added you to my blogroll.

Richard from http://hedgeagainstspeculation.com