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Schaeffer’s Investment Research Senior Technical Strategist Ryan Detrick and Trading Advantage President Larry Levin on the outlook for the markets.
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Go to Ryan Detrick Ryan Detrick as -- Schaefer investments shapers investments are right I wanna ask you first about what we're talking about when Larry how much of what happened today.
Is short covering and how much is real conviction that the market is is on an upward trend -- These we have put -- this little bit of both which you mentioned short covering what's interesting one thing we noticed office markets -- 7% year to date and the SP -- on the NASDAQ to short interest continues to increase right -- David short interest is actually a new yearly high.
Highest it's been since early march to march 2009 so again.
This is how -- bottoms formula negativity we saw that early June.
Now the market source workers went higher although shorts are forced to cover with a lot of Schwartz -- can be very bullish also -- -- look at option activity.
We're looking at record put buying on equities right here.
The highest we've seen since when since March 2009 so we see things -- that high since March 2009 and we just had only 10% correction tell -- it's way too much negativity.
Lowered expectations.
Any good news look what happened today any good news you can have explosive rally we've been targeting fifteen point five all year beginning of the year to now we still think opera fifteen point five US and.
Well Brian I think that that's the bottom line question are you calling for a bottom in the market right now it's one thing to say that -- thirteen thousands right around the corner for the dour fourteen.
Hundred for the S&P 500 is wanting to make that call but yeah.
-- we found a bottom in the stock market for now.
We sure think so again look at it technically the S&P broke to toured in moving average long term trend line -- -- Connell -- up just as quickly spiked above -- you know another interesting stat.
What happened it we've got the look on a ten week average who got the lowest number of bulls.
-- 30% the most -- since March 2000 mind there's been 500 times this decade it's been that low.
Every single time was an extreme low in the market and next two to three months was a really good rally so all so much negativity if we just don't get any bad news look at the news that -- Europe today.
Was it really that good you know I don't know list always issues but it was because they're working together we think that lowered expectations he could have an explosive rally we definitely -- -- Well Larry good rally here Larry I wanna go back to you because there are big question I've mentioned before this I was just reading this Spiegel -- German newspaper on line.
Before I came here.
That the German people all I wouldn't say there's a lynch mob for Merkel but -- they do not like what she did they were -- expect they were not expecting.
The negative criticism that the receive when they came home.
The whole impression in Germany of what happened Burkle was that she was outmaneuvered.
By the Italian in the Spanish prime ministers that they got the better robber and this thing is not finished yet so -- that is I'm also wondering Larry.
Whether anybody shorting oil at this point our our people thinking that that oil really overdid itself that there were solid short every.
Are their shorts in -- still land and oil today.
I'm sure a lot of sorts Heyman right rally -- you know 9% today seized at certainly a rally the professional trail -- -- felt like I below.
All of the -- certainly a lot of traders I think cable itself and the and then you've certainly got -- get people excited they're gonna wait they don't think this rally is gonna hold and the market's gonna keep going and they're gonna hold those short position.
Look for the -- shorts that I see people holding positions thinking there will be a new low we'll we'll get back.
A lot of this 9% and people who believe that not percent is that.
After the rally and then you know they want -- -- -- here waiting for to go back down off some of the -- I'm looking.
Right I wanna bring you back in here is -- -- challenge yield little -- it's it's one thing to be on a bowl on a day or in the Dow goes up 277.
Points.
But for the most part have a fundamental -- chains today.
I know we about the planned from Europe but ought to we really have sound evidence that -- on the track for recovery both in the US and globally.
You know I don't think we do because again what we've seen the last couple months obvious that the US economic data has been going lower but again.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- You know honestly like to see that February and again it's not about the economy -- -- it's about making money in those lower expectations with this upward price section we've seen for several years now.
All these selloffs have been blamed on Europe and maybe that's the reason but again ever gets all bear up and that's good -- up the good buying opportunities we think that's exactly the case once again here -- where we love these.
Guys yeah the walls of worry is something that's worth climbing and that's exactly what Barbara Ryan and Ryan Detrick thank you very much and Larry again those -- -- still active they're gonna be closing at just a couple of minutes welcome back to shortly back.
