Well I was a little surprised off the reaction we got after the GDP numbers this morning, the numbers were a little better than expected but still the first reaction was a sharp sell reaction. Whereas yesterday we had a jobless claims number that was worse than expected but the market shot up. So I decided to look into this a little further, above you will see the quarterly chart of GDP readings, counting this quarter we have 4 quarters of negative growth. According to economists 2 quarters is a recession, but 4 quarters is a depression. However, there are those that argue that that is not the case. I am not an economist, but I do not think you need to be one to read the above chart and see that drop off we have had and tell that it is not good. In fact we have to go back to 1982 to get any kind of numbers as close as the ones we have right now. And I think that is what the initial reaction of the market was for.
On the positive side the retraction seems to be in decline, the last down bar we had we significantly less than the previous. There is definently a lot of obstacles in our path, there’s no doubt about it. Again I stress though as traders, follow the trend until it is broken. If I as I analyze my volume data, see heavy accumulation from institutional buyers, I could care less how bad the news is I am taking my first buy signal!