Why bears are losing the argument

By Jani Ziedins | End of Day Analysis

Dec 07

Free After-Hours Analysis: 

The S&P 500 added 0.8% Thursday after Wednesday’s bearish intraday reversal turned into a lot of nothing.

One day’s down becomes the next day’s up, and so far, the market doesn’t seem interested in doing anything meaningful. November gave us a huge rebound; now it is time to rest.

That said, holding all of the recent gains confirms these levels are real and the index is not teetering on the edge of a collapse. If stocks were fragile and overbought, one of these waves of selling would have kept going. Instead, most owners shrugged and kept holding.

Stocks don’t have the strength to keep charging higher, but the longer we hold these levels, the more real they become. Something that refuses to go down will eventually go up. At this point, bears are losing the argument, and it will likely get worse for them if they continue fighting this market. If the November rebound was going to fail, it would have happened by now.

Bigger trading opportunities are coming our way, but it will take time. Stay patient and resist the temptation to overreact to this intraday chop.

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About the Author

Jani Ziedins (pronounced Ya-nee) is a full-time investor and financial analyst that has successfully traded stocks and options for nearly three decades. He has an undergraduate engineering degree from the Colorado School of Mines and two graduate business degrees from the University of Colorado Denver. His prior professional experience includes engineering at Fortune 500 companies, small business consulting, and managing investment real estate. He is now fortunate enough to trade full-time from home, affording him the luxury of spending extra time with his wife and two children.