Anyone who has read a Batman Comic, watched a Batman movie , or enjoyed the T.V. show knows what the infamous 'Bat-Signal" is. For those that don't here is the description from WikiPedia :
the signal is used by the Gotham City Police Department as a method of contacting and summoning Batman to their assistance in the event of a serious crisis
How does this relate to the market and stocks? Well on August 24th, I think Equities were issued their own 'Bat-Signal'. On that day, in a furious first few minutes of trading, many stocks experienced irregular and violent trading, with some hitting multi-year lows only to bounce back minutes later. One such stock was Baidu($BIDU), which hit $100 in the first few trading minutes, after closing at $152.91 the day before. Even more remarkable, the stock traded back into the $140s, before closing at $141.08.
(Here is a chart):
Of course some of the action can be dismissed due to HFT's, ALGO's, and just plain stupidity. But if the market is truly about supple and demand, maybe there is more to this than meets the eye. I have been saying since the August 24th lows, that the S&P was going to come back and retest those lows, and then test the October lows. I think many of those stocks that experienced those odd "Bat-Signals', will see those levels once again as well.
The argument to be bullish, is that the U.S. is not falling into a recession. The argument for the bears is that the Global slowdown will pull the U.S. into one. I don't pretend to know which argument is going to play out, but I sure as heck will be positioned for it as it pans out. Right now, I think positioning for some "Bat Signals" may pay out nice in the coming days and weeks ahead.
Happy Trading!
-JB