By looking at the intra day movement of the Dow yesterday (Wednesday, Oct 29)
At 2:30 PM, the Dow was at 8945.
At 3:45 PM, the Dow was at 9320, up 375 points.
At 3:55 PM, the Dow was at 8908, down 412 points in 10 minutes
At 4:00 PM, the Dow closed at 8984.
Is there a method in this madness ? I doubt it. This volatility tells us that the bear market is alive. The end of a bear market is marked by a fall in volatility. Stocks begin to sleep as a base building process begins. This is NOT the case now. While there will always be exceptions, it is wise to follow the most likely scenario (base building).
The rally that we are seeing now, is probably an intermediate up move in a bear market. I call this an intermedaite uptrend since the market is already 20% up from its lows. It is in fact a V shaped rally.
At some point, this up move will face resistance. the two resistance levels are: 2700, and, 3000. You can buy on dips, with the idea of taking profits on any up move. Always keep stop losses.
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The earlier blog URL will continue to work.