Even more interesting was, as Keith called it, the “projectile sell off” into the close yesterday, which we’ve outlined in the chart below. In our opinion, this type of capitulation selling is clearly a bullish indicator as hedge funds are forced to sell stocks to raise cash into month end. It was clearly a “I need liquidity!” type move and on the margin a bullish indicator in our notebooks.
While we would expect to see more action like this in the coming months, they are, obviously, more indicative of bottom than a top.
Daryl G. Jones