How many times have we heard that we should wait until after the election because then there would be clarity? Heck, we heard it so often even my mother reported it to me last week. Well, here we are two days and 3% lower after the election and I see folks on television telling us we should wait for the fiscal cliff to be resolved before we have clarity.
I found myself considering this on Thursday, since we clearly have clarity. We have a president by a clear win. There is no uncertainty. That's when I realized that folks don't really mean they want clarity. Wanting clarity is a euphemism for "still bearish." Once we have clarity, according to them, it means that they are now bullish.
I suppose that means risk on and risk off will fall by the wayside. Soon it will be clarity and uncertainty.
Then there is the constant citing of Apple (AAPL) being in bear-market territory. Someone asked when we started marking individual stocks in bull or bear markets. And, quite frankly, if you wanted to check on stocks in bear markets there are hundreds of stocks down 20% from their highs.
But this spring Apple became an index of its own. Remember when folks were buying and selling only Apple? Sure, that was fine as long as it was going up, but now that it is going down, well, heck, I guess Apple needs some clarity.
Apple's decline had been very orderly until the last two days when it went parabolic to the downside. This is not the finest channel in the world, but Thursday was the second hard day of selling and the third down day in a row for the stock. I know everyone has their sights on $525 as the place to buy Apple, so consider that it likely will not get there without bouncing first or it will simply blow right through it. I'd be in the bounce camp.
If you are looking for something bullish on the market, there are the same short-term oversold conditions I cited yesterday: the high put/call ratio, the high TRIN. To that I can add that the number of stocks at new lows did not expand on Thursday's lower low in the market.
But I continue to see gloom but no panic. I still do not see the VIX jumpy. I see the 10-day moving average of the put/call ratio is nowhere near where it usually is when we get a good low in the market.
The McClellan Summation Index continues to decline and I suspect the 50-day moving average lines will roll over now. This continues to add up to a likely short-term rally, but without panic and capitulation and the intermediate-term indicator either turning back up or having positive divergences, the rallies should fail.
Please note: I will be traveling for a few days. My next column will be Wednesday, Nov. 14. I suppose that guarantees we'll have volatility in the next few trading days!