Today was the bottom. Yes, THE bottom...
I honestly think today we saw the bottom of this correction.
And when I say the bottom I mean the range that we saw today: Somewhere between 1040 on S&P (which was the low for the day) and 1074 (the high of the day, which was also S&P's closing value).
And yes, I did change my mind. I did say recently I expect DOW to go all the way down to 9,000, but today, I just don't think anymore that's really going to happen.
First of all, everybody is expecting a bounce. Yes, just a bounce. Nothing more. Nobody believes market can start ralliying again and get to a new 52W high. Nobody. Neither Bulls nor Bears. However, I think the market is going to surprise everyone by doing just that. Hitting a new high without hitting a new low (new low being below 1040 on S&P, which I called the bottom above).
Secondly, last time this same thing had happened (S&P being very low in the morning just to finish at the day's high in slightly positive territory) was on 2/5/10, which marked the end of the previous correction (the one that started on 1/20/10).
Here are a couple of dates from that time, just to refresh your memory:
First the chart from 11/12/2009 to 2/5/10 so you can see the correction
And now the chart that will show you what happened after 2/5/10 (once again, the day that looked just like what we saw today)
I hope you get the picture (literally).
And the third reason I think we saw the bottom today is that the volume of shares traded during this correction vas very low. Nonsignificant. I know some of you might disagree with this statement, but if you do, I'm sure you are looking at the wrong volume. Don't look at the volume on DOW or S&Pchart, but look at the volume of stocks that are tenfold (or more) up from their March 2009 lows. When you do that, you will see what I mean (I plan on posting a little something on the volume over the weekend).
So that would be my case for the bottom of this correction. Nothing scientific. Just my opinion. I'm sure you have yours too (and probably much different than mine).
Good luck to all of you whether you agree or disagree with me!
Disclaimer: I had a few beers before I started working on this post. Had a couple more while working on it.