5.00 P.M We did not like the action today as a bear. This brings our previously painted scenario of 1033 right back on the table. If the market was actually topping out, we would not have liked to see today's gap down filled. The put call ratio this morning was 1.32. It has been consistently ~1 for two days. The interpretation is the market is bear heavy, lots of eager bears. China, India - the two markets which bottomed the first have fallen a fair way. We could have a scenario of a synchronized week or two of bounce, whereby the US makes a new high while china retraces this past move. $SSEC is also sitting at its 38.2%. So the stage is being set nicely.
Look at the chart of GS weekly -- it looks like a bull flag.
Look at the chart of D weekly -- it is hugging the underside of the 50W, with weakening volume. This is bullish action.
Look at KEY - it looks like a triangle, waiting for a rally to the 200d at 7.
We still own some puts loaded on from Aug 6th. We will let them go if the market fills the gap near 1005. We will seriously entertain 1033 SPX by August end - September first week.
As of now, we still believe there is going to be downside fireworks from mid september to november.
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