7/23T9:54 Notes From the Edge

The markets are trying to go higher into their overhead. The key to the last sentence is that they are going into their overhead! This is not a rally to buy. Do not lose patience just cause the month is coming to a close and I want to try and make the numbers look better. Remember its my money and if it were just my money I would not be buying this rally. The market will at the very least need to retest the lows set 2 weeks ago before setting up a real base. If we can just get that trade right over the next 6 to 8 weeks we will be looking good.

Lot's of good news spin from all corners has set this short covering rally in motion. When the EPS season comes to a close and the news spin dies down the markets will revert back to trend. This is not a comment of hope from me. This is a reality check. Just look at the major averages, still in major down trends. Even with the rally of the last week the markets are not even close to challenging the down trends. Also of note is the lack of participation from the IBD 100 index in this rally. The leaders are not participating in this rally, only the laggards are running off their lows. That is the definition of a Bear market rally!

This market continues to be an oil driven market. If oil is down the markets rally and vis verse. Oil has not broken its long term uptrend. This is a much needed sell off from overbought levels. The real game will start when oil finds support. Oil prices are selling off into the inventory numbers. Very often the the opposite direction to the close will occur before the numbers.