We are dangerously close to testing the Oct lows, and I’m not kidding. It’ll be tomorrow and I expect some sort of bounce here. There’s too much support for a no-support slice through. I also expect considerable volatility as the bulls and bears fight for control on an important day. We should also see some increased volume levels. Tomorrow will mark the 4th time we test. I would like to remind you that for anything, a 3rd or 4th retest is usually a bad sign, a breakdown typically follows not to long afterward, but in the words of Hank, “let’s not speculate”.
Especially pay attention to the diagonal downward trend in the 10-day charts for the SPX/COMP. They’ll provide significant overhead resistance. As for support, there aren’t anymore left besides the Oct lows. And yes, I am in cash until I see a sizable rally coming after a retest or a total, abysmal failure of the last support level.
In other news, I got invited to only one Wall St party. Usually, every firm is buzzing during this time to speculate on who’s got the biggest and baddest party. Unfortunately, 8/9 out of 10 have completely canceled their parties. Duh, we all know why. I guess MS can send me a cool monkey pen this year instead of the gold one last year. Also in other news, I was given advice to seek out “SINBAD” girls – “Single Income, No Babies, And Desperate”. Interesting…
SPX 1-day
SPX 10-day
SPX 6-month
NASDAQ 1-day
NASDAQ 10-day
NASDAQ 6-month
Here are examples of FAILED tests:
I covered my shorts from the last 2 days into the close today. We are too dangerously close to the October lows now. And, though my get tells me there’s a chance that there’s another safe 100-200 points lower before we get any sharp squeeze, I decided not to take that risk. Like you, I believe there’s more of a trading edge now taking a step back and reassessing the tape. If we bust through support in the next few days, I’ll sit back, patiently waiting for a retest so I can reenter the market short.
As always, great work!
-Phil
very good .. u deserve the highly prized & coveted, TAB ! 🙂
that was quite the retest!
Give this man a tab!!!