Stocks Rebound On W Bottom & B/W Brothers Signal

Fundamental Analysis
Seriously, what the stock market did today (Dow +115.74, Nasdaq +21.75) was nothing fundamental. Yes, there was a couple of interesting mergers but nothing that works out to something that can move the stock market this much in a day. The low volume today also suggests that investors are actually sitting on the sidelines ahead of this week's heavy weight economic releases. Today's stock market gains are really the result of a small but strong influx of funds. Let's see if the technicals paint a more meaningful picture.

Technical Analysis
Stocks rebounded today on the "W" bottom setup and Black & White Brothers candlestick formation I mentioned yesterday and therefore did not come as a great surprise. What was discouraging was the low trading volume today. Such a low trading volume do not give much credibility to this rebound and usually ends up like the stock market pullup of 6 March to 12 March... short lived. If the Dow fails at 12300 again, completely negating the W bottom formation and the B/W brothers signal, it might laspe into a bear flag breakdown into another bear trend. This is certainly not the time to start feeling bullish yet.


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