by Rick Ackerman, Rick’s Picks
The buying power in this aging bull market is not coming from bulls, but from short-covering bears. The question is, how many times can the dirtballs who control the game count on the bears to stick out their chins for another sucker punch.
Notice in the accompanying chart that the Dow Industrials have gapped higher on two of the last three sessions. The first time the ruse worked, goosing stocks with enough power to keep them moving higher for a second consecutive day. But the second time, on Monday, stocks fell hard shortly after the gap-up opening-bar. And yesterday it was even worse. Any trader foolish enough to buy in the early minutes of the session was underwater by day’s end.
Fool me once…fool me twice…but fool me three times? Not likely. When the opening bell sounds on Thursday, bears are going to be extra cautious about getting sandbagged again. Absent their urgent buying power, DaBoyz will change their tactics, pulling their bids so that stocks begin the day with sellers exhausted. Even then, with supply depleted, DaBoyz are going to have a tough time coaxing stocks significantly higher. This is how bear markets begin. At the moment, it looks like DaBoyz will have to let the market fall significantly before they can count on panicky bears to do the heavy lifting.
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