A Glimmer of Hope

The market has been down as much as 2% today, but all I see is a ray of sunshine. Why so optimistic? Well this is a short term prediction, but I am still smiling.

I have been bantering all day on the TIE Message Board about some technical indicators and the performance of certain stocks that encourage me. The market is still range bound and, when viewed with a more long-term perspective and combined with some short term indicators, the results are encouraging to me.

Very briefly, here are seven reasons to be hopeful. This is what I am seeing:

1. Today's sell-off looks organized. The selling was in waves and coordinated. The footprints were noticeable and it is something that I have less fear about.
2. The S&P and XLF held up really well under pressure today. The Nasdaq and the DJI fell, but the XLF and S&P held key support levels. The other indexes fell harder because they could without additional technical damage. The XLF bounced off $28.31, a retest area set in December that confirmed the November bottom. The S&P has major support at 1430 and some secondary support at 1440.
3. Some of my stocks were up in this tape. ROCM was the big winner today (Up 6.5% percent), but BTJ was also up and EGY finished above where I bought it. I was also pleased with PCP (which I keep thinking about selling) and AAPL which showed good bounce-back under some pressure.
4. The Options Pit is calling a bottom. Not the most reliable indicator, but I haven't seen the CPCE have a higher put/call ratio since the August bottom.
5. The Yen is on an unsustainable path with the Dollar. The currency has taken off at a rate that has to subside. The appreciation is fairly dramatic at a rate seen in August and November. It is now far enough away from its moving average that a pull back should be expected creating a tailwind for stocks.
6. The Fed minutes seem more Aggressive with Rates than the Orginal Statement. The market came off its low enough to absorb this news. On the surface it sounds bad that the Fed is alarmed enough to potentially cut rates further aggressively, but I would be more worried about the alternative.
7. The TRIN is signalling a bottom. Again, not enough data to confirm, but it is reaching the same highs seen in August and December.

Remember that I said "glimmer of hope". That is all I have at the moment, but it was enough to keep buying today. There are a few more oscillators that need to turn before we start calling bottoms here, but 2008 is not yet doomed even if a one day down record was shattered today.