Stock Market Technical Analysis Blog
Click on image to enlarge
After yesterday's blistering short squeeze there are no doubt a lot of traders wondering if this will be another two-day blip or if institutions will step up to the plate and put some legs on this rally. It's key to monitor the closing and afterhours institutional activity to get a read on what the big Wall Street firms are doing. Today's closing institutional blocks and extended hours institutional blocks on any other day would be considered extremely heavy but on a Friday it is exceptional. Most of these closing bell trades in white and afterhours trades in black went through above the ask which implies that the institutions are working together well and want to make something out of this PPT triggered short squeeze yesterday morning. Granted there are not many "twin" paired blocks which would have implied that they are expecting a major move up from here but rather a lot of large random amounts which implies that they will be in as long as sponsoring the momentum is cost effective, whether that is two days or two months.
There is also a background picture operating here at the same time. Today's poor job numbers have substantially increased the likelihood of a QE3 probably enough so that many institutions are placing their bets now at these lower prices. Then if QE3 happens in the next 3 weeks and they will already be in big before the prices take off and run from a possible quantitative easing announcement which would make stocks run higher like they were on steroids.
There is also a background picture operating here at the same time. Today's poor job numbers have substantially increased the likelihood of a QE3 probably enough so that many institutions are placing their bets now at these lower prices. Then if QE3 happens in the next 3 weeks and they will already be in big before the prices take off and run from a possible quantitative easing announcement which would make stocks run higher like they were on steroids.
Alan
