No Tradable Bottom Yet

Trader Talk

The major stock indexes traded back and forth the unchanged level today, with the NASDAQ advancing 1.0% on 2.6 billion shares, while the Dow Industrials rose 0.7% on NYSE volume of 5.2 billion shares. The leadership profile remains very negative, with 55 stocks making new highs versus 801 stocks making new lows.

The short term momentum oscillators remain negative, confirming the bearish stance of the AlphaKing Trading Indicator. We have no new trades at this time.

The overall pattern remains solidly bearish, with every sell-off running in five waves and every bounce in three, all absent any sign of a capitulation spike down and corresponding up-spike in fear for the VIX, which suggests no meaningful or tradable bottom has been reached yet. Speculation in commodities remains high, with investor sentiment remaining ridiculously bullish, and thus that trend is destined for a hard fall somewhere around here. We do expect a summer rally of sorts for the stock market - once a capitulation low is reached - though an outright crash is not out of the question. What walks and talks like a duck is best called a duck until proven otherwise.

Kevin Wilde, Chief Trading Strategist AlphaKing.com.

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