Well, you've been around long enough to know how accurate these fake prints are. So, after this sell off is finished, to whatever level, I do see the bull back in charge until we reach the DIA 118.16 area.
After that, I'll have to start back to being bearish again.
During the move up, JNK flirted with the 20 ma (as support) many times. I think it will back-test the 20 ma from the underside first. If it closes underneath, I would agree that the 50 ma is the next likely target.
Back in January, $RUT made a new high around the 20th ($SPX made it's high on the 11th, IIRC as did IYT). JNK was already making red candles down after the 11th. The point here is that there was clear non-confirmation of new highs in several asset classes.
JNK has not yet taken out the low set on April 19th (when you adjust the price for the $0.31 dividend). At this point, I'm taking the lack-of-moves in IYT and JNK as non-confirmation of the bearish case. That could change tomorrow!
You think it's going back up tomorrow? A gap down, and big sell off, closing at the low… is very bearish. I really doubt that it goes back up tomorrow. I think it's going to that 50 sma before bouncing… of course I could be wrong?
I think that the main reason the US indexes have not suffered as much as the rest of the world is that the US is still viewed as a “safe haven” for assets. What I've been saying for the last couple of weeks is that smart money has fled from Europe and is currently sitting in things like TLT (RSI on TLT has not been this high during the last year!), LQD, etc.
Take a look at the chart of JNK (Junk bonds), and compare that to the price action in January / February. Does the price action look corrective or impulsive? If we are in a wave 3 down, it is nothing like what happened in Jan/Feb. … yet!
I guess it's possible that we start a channel down like Carl's chart, but the way I'm reading the market, I don't agree. We just had 350 million shares dumped today, and the average volume up has been 150-180 million shares. I don't think the big boys are done yet.
But, it's always good to see other alternatives, as that's what this blog is about… sharing ideas. Although I'm mainly bearish, I always welcome the other side.
Believe me, I've been wrong many times, so listening to others opinions will help me, and others, to look at all the possibilities.
The other chart is just showing that the market is oversold, which you and I know that it can remain overbought or oversold for an extended period. Notice that the MACD's aren't showing any sign of turning back up yet.
So maybe… we get a bounce tomorrow, but I see more selling coming.
I like to pick a small number of things to track, and focus focus focus. I have done SPY calls/puts but mainly as a hedge. I like to watch real estate and silver (which means that I also watch $USD), with occasional forays into $RUT and oil (usually via long or short DTO).
If you believe the bear hype, REITs are going to go to zero. They just set a new high yesterday on the strength of earnings reports. I would find it really strange that we're in a wave 3 down without REITs taking a serious beating, wouldn't you? I think this is some other complex corrective structure going on — Alphahorn has this:
Hmmm, I have to agree with you that chart doesn't look bearish. But, the overall market still looks bearish too me. Maybe it can rise tomorrow, while the market sells off?
Well, you've been around long enough to know how accurate these fake prints are. So, after this sell off is finished, to whatever level, I do see the bull back in charge until we reach the DIA 118.16 area.
After that, I'll have to start back to being bearish again.
During the move up, JNK flirted with the 20 ma (as support) many times. I think it will back-test the 20 ma from the underside first. If it closes underneath, I would agree that the 50 ma is the next likely target.
Back in January, $RUT made a new high around the 20th ($SPX made it's high on the 11th, IIRC as did IYT). JNK was already making red candles down after the 11th. The point here is that there was clear non-confirmation of new highs in several asset classes.
JNK has not yet taken out the low set on April 19th (when you adjust the price for the $0.31 dividend). At this point, I'm taking the lack-of-moves in IYT and JNK as non-confirmation of the bearish case. That could change tomorrow!
With the gap down on JNK today, it looks too me like it want's to go back to the 50 sma at 39.00…
http://finviz.com/quote.ashx?t=jnk
You think it's going back up tomorrow? A gap down, and big sell off, closing at the low… is very bearish. I really doubt that it goes back up tomorrow. I think it's going to that 50 sma before bouncing… of course I could be wrong?
I think that the main reason the US indexes have not suffered as much as the rest of the world is that the US is still viewed as a “safe haven” for assets. What I've been saying for the last couple of weeks is that smart money has fled from Europe and is currently sitting in things like TLT (RSI on TLT has not been this high during the last year!), LQD, etc.
Take a look at the chart of JNK (Junk bonds), and compare that to the price action in January / February. Does the price action look corrective or impulsive? If we are in a wave 3 down, it is nothing like what happened in Jan/Feb. … yet!
I guess it's possible that we start a channel down like Carl's chart, but the way I'm reading the market, I don't agree. We just had 350 million shares dumped today, and the average volume up has been 150-180 million shares. I don't think the big boys are done yet.
But, it's always good to see other alternatives, as that's what this blog is about… sharing ideas. Although I'm mainly bearish, I always welcome the other side.
Believe me, I've been wrong many times, so listening to others opinions will help me, and others, to look at all the possibilities.
The other chart is just showing that the market is oversold, which you and I know that it can remain overbought or oversold for an extended period. Notice that the MACD's aren't showing any sign of turning back up yet.
So maybe… we get a bounce tomorrow, but I see more selling coming.
Thanks for posting your thoughts too…
I like to pick a small number of things to track, and focus focus focus. I have done SPY calls/puts but mainly as a hedge. I like to watch real estate and silver (which means that I also watch $USD), with occasional forays into $RUT and oil (usually via long or short DTO).
If you believe the bear hype, REITs are going to go to zero. They just set a new high yesterday on the strength of earnings reports. I would find it really strange that we're in a wave 3 down without REITs taking a serious beating, wouldn't you? I think this is some other complex corrective structure going on — Alphahorn has this:
http://2.bp.blogspot.com/_-p17nqJfPI8/S-COjqYl6…
and Carl Futia has this:
http://1.bp.blogspot.com/_sL6ril9lDkw/S-BBR12z4…
Carl's channel is readily verifiable based on the price action in the coming days.
I made a comparison to the last sell off in my newest post that I just uploaded. Here is the chart from it…
http://reddragonleo.com/wp-content/uploads/2010…
It may not play out, but the futures are down right now, so we'll have to wait until tomorrow I guess?
Do you every play the spy, or just other etf's and stocks?
I'm betting that shorts piled on the REITs when the broader markets showed weakness. They'll get squeezed tomorrow (I hope).
Usually, after a distribution day (which today was), the next day is green, followed by more selling which sets a near term bottom.
http://cobrasmarketview.blogspot.com/2010/05/05…
Looking at a bigger picture, you can read some statistics here:
http://www.biasedsurvivor.com/blog/?p=242
Hmmm, I have to agree with you that chart doesn't look bearish. But, the overall market still looks bearish too me. Maybe it can rise tomorrow, while the market sells off?
For an alternate view, see the chart I posted.