the Hope Trade is back!

The Hope Trade is back! After being down for the past six sessions, the market made a dramatic move up. Traders jumped in and bought the rally. They hope that the market has reversed and will continue to go up. Next week we will see if they are correct. The market has to continue to go up on increased volume for the Bulls to be correct. If past history is right, the rally will fizzle out and the downtrend will continue. This is called the Hope Trade because in a Bear market, every rally is a Hope that the downtrend has reversed. When the downtrend returns, the Bulls, once again, lose hope and begin to sell their stocks. This can and does cause panic on the downside. Remember that we are in the beginning of Wave Three which can become quite violent. Wave Three has quite aways to go, definitely all through September.