Monday, November 28, 2011

We were due for an oversold bounce, and we had a pretty good one following upbeat news about Europe and Black Friday. Breadth was better than 4-to-1 positive, but volume was extremely light, and we had few signs of real momentum. This market has been lacking leadership and pockets of speculative interest for quite some time and nothing new emerged today.

I don't know how many times a low-volume, oversold bounce has turned into a V-shaped move that just keeps on going. There's still lots of negativity, the bulls are poorly positioned and end-of-year seasonality should be kicking in, so conditions are good for an upside surprise.