Our Bounce Lasted Just One Day

Stocks could not manage to sustain the bullish reversal on Tuesday. Crude oil moved higher and continued financial meltdown fears helped push stocks lower. The extreme oversold conditions we saw on Tuesday mid-day were extreme enough to push a rally. However, those oversold conditions continued on Wednesday. Oversold/overbought markets can stretch for periods of time longer than many expect. This is the market where trying to catch a bottom using an oversold indicator will only burn your account dry! Price and volume action are tell us that prices are headed lower for stocks and lower lows are on our horizon. Crude Oil should continue its trend higher and ultimately blow off its top. This market is continuing its bear market status.

Bear markets usually last anywhere from 9 months to over a year. However, Bull markets do not immediately proceed Bear markets as sometimes it takes time to head sideways prior to a new Bull. At some point the financials will clear themselves from the mess they are in and crude oil will top out. History will repeat itself in one form or another we just have to be patient for these things to sort themselves out. In the meantime, enjoy the July 4th holiday…INDEPENDENCE DAY!

Have a beer for me and be safe!

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