Snapshot Notes - November 19, 2007

As of:

SPX 1490

As I mentioned last week, I am currently on my annual migration to the great northwoods of my home state of Wisconsin through this week. I'll still try to check in daily, though, so let's get to it.

When we left off on Friday, I touched on a few more of the true extremes that had registered among the guides we follow. Those were added to a quickly-increasing pile of evidence suggesting that investors have become overly pessimistic during this last push lower.

When we combine the nearly overwhelming number of indicators currently sitting in "bullish" territory for the market (as seen near the bottom of the Daily Overview page), with the questionable-but-still-positive longer-term trend in the broader indices and the looming positive seasonality, I felt that some more short-term weakness should set up a decent shot at another long-side attempt.

We got that weakness today (the typical post-expiration letdown), now the real test begins to see whether some of these potential positives can have an impact. Many of our short-term measures have cycled back down into oversold territory (for the S&P at least), joining the long list of intermediate-term indicators already dwelling there, plus we have the post-expiration hangover out of the way, plus "turnaround Tuesday" is on its way (which has certainly lived up to its name recently), and the consistently positive Thanksgiving period is directly ahead.

That's the kind of formula that should give ample excuse for bulls to buy, and if we don't see them step up, then I'm going to have no choice but to become significantly more worried about the longer-term health of this bull market. We don't *have* to rally tomorrow or else all is lost, but we should really be seeing some of these bullish patterns bring buyers back in very soon. I'd like to see an intraday or consecutive-day reversal to become more aggressive with longs, but as it stands now I do think the risk/reward has tilted firmly to that side.

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