Equity Markets: Technical Update (11-19-08)
During the neutral range, I was thinking to myself, “there are two options available for the market: 1) we form a long tedious rounded bottom, or 2) we form a very large bear continuation flag. #2 came really quick in the last hour. Over the weekend, I also stated that I had those two conditions that needed to be met. It’s Wednesday, so both have expired and have not been met (not by a long shot). The bottom line is that we have broken our critical support level and the S&P 500 is reaching the 2002 lows which are currently around the 775-785 level. Unfortunately, this suggests that we have at least a very possible short-term 3-5% additional downside move. Whoever is still buying and holding…should probably stop. It doesn’t make sense. Want some advice? Buy once we make a higher low (that means you might not be buying for a while). Don’t be stupid. This is exclusively a traders market, all others will get/are getting killed and it’s all your fault.
I, on the other hand, made a sweet 7% today adding to a 5% gain yesterday. This is a tricky market and I still remain mostly in cash overnights. There is too much uncertainty and the risk associated with holding overnight. I could hedge, but I just prefer to be in mostly cash. The $RUT, $SPX, and $COMP are all in trouble. The $DJIA is actually sitting at Thursday’s lows, but this divergence will soon be corrected. The VIX is trading in a upward range and today’s candle suggests additional upside. The financials are in some serious trouble and there is no possible way for the market to rally without them, so don’t forget that. What’s the only chance left for the market? We have to cancel out today’s loss tomorrow (gain 400+ points), and that is highly unlikely. Today was just an all out bloody day and longs got mauled by the bear demon or the cartoon blood drop.
SPX 1-day
SPX 3-day
SPX 10-day
SPX 6-month
VIX 10-day
VIX 6-month
Clever.
R U expectinganother leg down since the volume did not spike?
Did you here on Bloomberg this morning that another 700 hedge funds are possibly going under creating redemptions of up to $600 bln?
That spells prolonged pain in the touhas….
Can you calculate how many days it will be before we hit zero?
12.666
impossible to hit zero.
if the Dow got cut in half every DAY it still would NEVER reach zero. 10,000 becomes 5000 then 2500 then 1250 then 675 and so on. even at 1 it would go to .5 then .25
it’s not going to 0… ever.
roflmbo @ never 0 says:
“impossible to hit zero.
if the Dow got cut in half every DAY it still would NEVER reach zero. 10,000 becomes 5000 then 2500 then 1250 then 675 and so on. even at 1 it would go to .5 then .25
it’s not going to 0… ever.”
your brother in the battle…
Zero. If that were to happen, we’d be back in 1792 when the NYSE started and everyone was trading in the damn streets.
It’s not confirmed whether it is a primary leg, we’ll need 1-2 more days for that. The volume typically spikes as we get closer to the end of a leg. Many leaders are beginning to go parabolic…down, that is.