Investors Get Scorched [3:24m]: Play Now | Play in Popup | Download (224)

Is this what it feels like to go to hell and back? Check the soles of your feet, are they scorched? Or are you one of those skeptics that’s convinced yourself that this market is going down to the 2002 lows, no matter what, and all rallies are false? I know, I know, we’ve been here before. Or have we?

So, not only did we retest the recent low, but we blew past it, touching 818 on the S&P, a full 2% below the 839 level we’ve been focused on. That was a moment for real concern, because at that depth I didn’t think we’d have the ability to recover. But we quickly made it back to 839, and almost lost it again, and then made a mad run that simply upended the Bears, and they finally stepped aside.

The one thing that was missing in our last bottom was a strong reversal of the advance decline line. And today we got it. And what a reversal it was! At one point decliners led advancers by 4 to 1, and we finished up with advancers leading decliners by more than 3 to 1! Wow!

Apple investors have got to be thrilled that we recaptured 95, and in convincing fashion. Todays’ rally completely engulfed the past two down days! And that’s great, but there’s still a lot of work ahead, with the 20s and a gap down both at 101. I’ve often said that Apple is a proxy for the markets, and lately it has disappointed. But if Apple can take out the 20s convincingly, then we have a real shot at the 50s.

Are you still a skeptic? Well then, there’s the volume. There were over 3 billion shares traded on the Nasdaq! That’s a the big boys coming out to play, the institutional traders, not just a bunch of shorts covering.

So now the Bulls are re-energized, they have institutional traders on their side, and the wind at their backs. It’s time to retake the 20s folks, and if we can muster the momentum, we’ll go for the 50s as well! How long will it last? Well that depends on how oversold we get. But for the time being, you have to go with the cards you’re dealt.

If I’m giving you the impression that I think we’ve hit bottom, well I’m telling you right now, that I really don’t know, and I think it would be presumptuous to say that we have. But I do think we have a tremendous opportunity to catch our breath and take advantage of an upside run. And when things turn the other way, it’ll be time to reassess and jump back into the fire.

The Investor in the Wilderness Podcast

That’s right, many of the Wilderness posts are now also simulcasts as podcasts. You can subscribe to the Wilderness podcast on iTunes Just Click here, or click Gyasi the Ridgeback to the left. My goal is to produce a podcast prior to each trading session that helps prepare Wilderness Investors, and one on the weekend that will cover a variety of topics. Listen to a few of the episodes, and if you like it, then subscribe and leave a review.