About Shark Watch
Wednesday, July 16 - 4:32 PM
Well, after a choppy morning, the pullback in oil and decent WFC earnings finally triggered the sort of oversold bounce that everyone has been looking for. Of course, as is the case with so many bear market rallies, the doomsday scenarios from just a couple of days ago that resulted from a bank failure and emergency government actions were all but forgotten as shorts scrambled to cover their positions and longs began to buy in case some of the oversold conditions were relieved. Once that happened, it started to feed on itself, and we were left with a market that bounced well over 2.5%.
Of course, the big question is if we can see some follow-through. Like we’ve pointed out, each bounce over the past two months has ended up being a one-day affair, giving trapped longs a chance to escape and shorts an opportunity to remount their downside bets. We’ll see if things are different this time, and if earnings reports are terrible, then they just might be. That said, we can’t forget we’re in a bear market, and as a result, we can’t count on any action to the upside to last.
Have a great evening, and we will see you tomorrow.