The bulls continue to hold on by a thread – it’s quite impressive really, the amount of time being spent at these lows clearly favor the bears in terms of weakening the support levels, but bullish divergences occurring throughout the most common of indicators, makes an interesting argument that the bulls are on the verge of putting in place a major rally. But please understand when we say rally, we don’t mean bottom – there’s a difference.

The entire market session minus the last 30 minutes of the trading session are almost pointless in the grand scheme of things, essentially its nothing more than jockeying for position between the longs and shorts, as the real action continues to occurs after 3:30 PM EST. That is when the market really starts moving and a great time to jump in on some intra-day plays, like PERY which we shorted at 4.62 and covered at 4.38 for a nice 5.1% gain today.

By the way, since we have been speaking of divergences, by far one of the biggest and most important divergences that we have seen is with the VIX. At the market’s lows, the VIX was registering levels in excess of 90, while now we are only at levels of 70ish (VIX tends to increase as the  markets sell-off and vice-versa).