Wow - what a day yesterday. Markets started out being down near -2% for the day and it looked like another ugly day , Transports got down to 4000 - NYA got down to monthly MA(200) and by the end of the day we got a major massive reversal and run into close and cloed up 2% for the day !
This was an IMPRESSIVE rally and by then I got BUY SIGNALS on EVERY single indexes + the euro.
This means that I think this was the bottom of 2011 - or at least I give 80% chances that the lows for 2011 is now in.
There is however the possibility that this could be a backtest of this area 1119-1120 area which we broke down of some days ago - but by looking at where transports and other indexes hit the lows , looking like backtest a 5 year trendline which is really bullish.
Remember my bottom date target is 7th of October - so anything is still possible - but the bottom date is usually +/- 1 week from this date so the bottom might very well be in as I called on transports yesterday.
The thing is just - markets all now have the BULLISH MACD DIVERGENCE on DAILY chart - this was what I was looking for last weeks - to make a LOWER LOW than August lows at 1100 and then have a bullish MACD.
Russell or small caps hit the 50% fib retracement from 2011 highs to 2010 lows - so for now this could still just be a big correction we had. By my thesis markets will see another impressive rally from this month to sometimes early next year 2012.
All my solar stocks got up 10-20% and made an impressive rally which I love , its very possible the lows for my small caps is in now.
The euro FXE got a daily buy signal and have bullish MACD divergence too - in case euro begins to rally from here - markets is going to rally more.... and right now I'm bullish euro and bearish US dollar for awhile.
So overall if the lows was not in , and I give it 80% chances that THE bottom of 2011 is in now - then we might have an impressive rally comming into year end and possible early next year too..
Take a look at TLT - which has gone up when markets gone down. TLT made a dark cloud cover candlestick which is = BEARISH reversal.
IMO short all TLT or buy all TBT you can as TBT made a bottom piercing pattern.
Even TVIX made a bearish engulfing which is one of the most extreme bearish candlesticks from the top - I would simply LOVE to short the TVIX or VIX now - an amazing spot imo.
All I can say is - that after yesterdays reversal and how I look at many stocks and names - I think the bottom of 2011 is reached and I'm getting extreme bullish markets now down here.
I bought the dip yesterday and got long EDC 11.75$ very nice entry - first I bought it at 11.27 right at the bottom yesterday - but sold with profits and rebought it 1 hour before close yesterday again. Right now I think I will be holding it for a longer swing - and I may add on it on a dip or pullback in mkts.
Conclusion:
So for now very bullish markets , 80% chances the bottom for 2011 is in now with this reversal and I see the markets making an impressive rally into year end comming + early next year.
I'm long lots of stocks and added more THLD and CYCC yesterday.
Long :
STP
THLD
CYCC
YGE
TSL
And I'm ready for so many other good looking plays now.
Just in case if bottom is NOT in - then bears needs to take us below 1100 again comming 1-2 days - if not.... mkts full bullish.
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