The Case For a Bounce

I'm not one of these "The Market's oversold, it's gotta bounce" kinda guys. In fact, I think an oversold market is an indication of just how bad-a-shape that market is in. And this media "20% makes a Bear Market garbage=a bounce" and all that other crap is just that in my humblest of humbles.

However, when confronted with a dearth of consistient, sensible, credible evidence, I consider the possibilities, even if they may run along the mainstream or counter to it. I've gathered a few charts for you to check out, all of them are Proshares UltraShort charts because, and take note, when looking for evidence of accumulation or distribution it seems to be easier to find it, or I find it first in the Proshares before I find it in the underlying issue.

The Charts are DXD for the DOW, TWM for the Russell 2000, SDS for the S&P-500 and SKF for the XLF. All charts are 15 min. and are various versions of my 3C indicator, which is based on TeleChart's proprietary TSV (Time Segmented Volume) indicator. Both 3C and TSV are used in similar fashion, although 3C differs in that there are no values associated with readings. All 3C analysis is confirmation/divergence analysis. For instance, a strong trend making higher highs should also see the 3C indicator making similar higher highs.

All the charts below demostrate some level of negative divergence. This tells me that there appears to be widespread distribution in all of the Ultrashort ETFS below as the market continues to drop. More or less, it looks like locals, pros, market makers, whoever... are liquidating their positions into strength and leaving someone else to hold the bag.