Action:
Above, are some of the major indices DJI, SPX and TRAN respectively.
As can be seen, we are at right at the deciding positions of these charts. Today's sell off took the charts right on the doorstep of the killing fields. Any break of these lines, and things could get very ugly.
As can be seen, we are at right at the deciding positions of these charts. Today's sell off took the charts right on the doorstep of the killing fields. Any break of these lines, and things could get very ugly.
We are hoping for a bounce in this market, due to our small long position. True, the bounce has been elusive thus far, and we are on the threshold of a major fall here. But we are still believers in a rally, since we see some "not-so-bearish" things on the charts.
1. There is a bullish MACD divergence on the SPX, DJI.
2. The stochastics on most of the indices are oversold. They have not been so oversold for a long time.
3. The number of bears given the PCR (put call ratio) is overwhelming. My skim on some of the ETF Yahoo message boards, confirms this opinion, not that it is an effective indicator. But everywhere in town, it is painted red.
Since, we need to see what risk exists on the downside, if we do continue selling off, this market can see 1200's on the SPX very soon. In our opinion, the next 3 days could be the key. We are expecting a rally within the next 2-3 days. The bounce if it does occur could be a big one, given the amount of shorts in this market. We believe 12200 on the DJI, is not impossible. But right now, this rally is hostage to OIL. We absolutely need OIL to crack here. Every other commodity has taken its beating expect oil. Even metals/coal sold off today, as we thought would happen in our previous post. Lets see!
1. There is a bullish MACD divergence on the SPX, DJI.
2. The stochastics on most of the indices are oversold. They have not been so oversold for a long time.
3. The number of bears given the PCR (put call ratio) is overwhelming. My skim on some of the ETF Yahoo message boards, confirms this opinion, not that it is an effective indicator. But everywhere in town, it is painted red.
Since, we need to see what risk exists on the downside, if we do continue selling off, this market can see 1200's on the SPX very soon. In our opinion, the next 3 days could be the key. We are expecting a rally within the next 2-3 days. The bounce if it does occur could be a big one, given the amount of shorts in this market. We believe 12200 on the DJI, is not impossible. But right now, this rally is hostage to OIL. We absolutely need OIL to crack here. Every other commodity has taken its beating expect oil. Even metals/coal sold off today, as we thought would happen in our previous post. Lets see!
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