Cynicism Rules, OK! Tuesday Morning Joe. 6 October, 2015. Major...

Cynicism Rules, OK! Tuesday Morning Joe. 6 October, 2015.

Major Indices, Europe and America

Dax +2.74%. UK +2.76%, France +3.54%, Italy +2.73%. The strong day in Australia +1.86% rolled around the world. First into Asia (Tokyo +1.58%, Singapore +2.08%, Hong Kong +1.62%India +2.12%). Then into Europe and the Americans followed. Dow World Index +1.96%.




DJ +1.85%. SP500 +1.83%. Nasdaq +1.56%. New York Composite +1.95%, Russell2000 +2.47%.
It's easy to get euphoric after a day like today. Euphoria should lead to cynicism for those who've been long time in the markets. So - should we now be cynical about our cynicism.

So - is this the end of the correction? I have to think so. Remember, on Friday, the Dow Jones was down nearly 300 points and then finished up +1.23%. That's a massive reversal. Today, the major indicators had a small gap up - that's rare.

Let's have a look at the internals. I was suspicious about Friday's big rise because we also saw a drop in the H/L Ratio. But today we have a strong confirmation of the bullish sentiment in the H/L Ratio. The NYSE H/L Ratio came in at 71.4% after being at 4.3% on Friday. New Lows have dropped off from 268 on Friday to just 20 today.

Here's a chart for the H/L Ratio:




The trend of lower highs in the H/L Ratio began back in April. Today broke that down trend to the upside.

This looks better.

Here’s a regular candle stick chart for the SP500:



The Super Trend Line has been broken to the upside (see the change in colour). Most indicators still have upside room to move before they are overbought. MFI is the fly in the ointment. I'd like to see that performing better.

Those who are still cautious might wait till we see a break above horizontal resistance and the 50-Day MA. But I'm thinking this looks OK.

RB.