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Market back to the lows of October again, from sp500 chart, around 850. This is so IMPORTANT. We've had closing lows right here three times now. Each of those has resulted in a slingshot move higher back toward the declining 30-day average, BUT I WANT TO NOTE THAT EACH TIME IT HAS BEEN A SMALLER ADVANCE. On Oct. 10, the reaction high was almost 1,050. The next slingshot advance stopped at a reaction high of 1,000. The last one, which was last Wednesday, only resulted in a move to a reaction high of 910. In other words, sellers were more and more anxious to dump enough stock to push the market back down heavily.
So the bad news is that if the pattern holds, the current decline to 850 might only result in a move back to around 880 before sellers pounce again.
Furthermore, it's rare for the market to have back-to-back sessions in which there are losses of more than 2.5% in the final hour -- and that it has tended to be lead to a nasty decline the next day. The last time this happened was October 7 and October 8, and October 9 was a disaster.The pattern also occurred just before the 25% crash of October 19, 1987.
I take history very seriously. I hope it doesn't in the same way as it has in the past. But:If stocks start out higher tomorrow, get to around 860 to 870 and then deteriorate.
It's very hard to outright"short sales" right here.Let's face it: The 850 level has held three times, and the 818 level held as recently as Thursday. Moreover, the one silver lining is that volume has been declining in recent days, as I can see in the chart,which is a positive.
In summary, the next couple of trading sessions will be very important. A decline below these lows, and particularly the 818 level, would trigger a lot of program selling and a total loss of heart among value buyers,as bulls throw in the towel. On the other hand, a move higher on Tuesday or Wednesday is something that should be watched very carefully as well. Initial upside targets would be 890, then 950, then 1000 then 1,150 and finally.... My expectation is that if we get that far, one of those levels will be sold hard and we'll ultimately end right back where we started, or worse.
THIS IS A GOOD TIME TO BE NEUTRAL,ON THE SIDELINES AND HOLDING CASH if you are new to market. More agile investors may wish to try to catch a big decline or advance. THOUGH VOLATILITY IS SO EXTREME LATELY THAT IT IS EVEN A TOUGH GAME NOW FOR VERY EXPERIENCED TRADERS.更多精彩文章及讨论，请光临枫下论坛 rolia.net
Market back to the lows of October again, from sp500 chart, around 850. This is so IMPORTANT. We've had closing lows right here three times now. Each of those has resulted in a slingshot move higher back toward the declining 30-day average, BUT I WANT TO NOTE THAT EACH TIME IT HAS BEEN A SMALLER ADVANCE. On Oct. 10, the reaction high was almost 1,050. The next slingshot advance stopped at a reaction high of 1,000. The last one, which was last Wednesday, only resulted in a move to a reaction high of 910. In other words, sellers were more and more anxious to dump enough stock to push the market back down heavily.
So the bad news is that if the pattern holds, the current decline to 850 might only result in a move back to around 880 before sellers pounce again.
Furthermore, it's rare for the market to have back-to-back sessions in which there are losses of more than 2.5% in the final hour -- and that it has tended to be lead to a nasty decline the next day. The last time this happened was October 7 and October 8, and October 9 was a disaster.The pattern also occurred just before the 25% crash of October 19, 1987.
I take history very seriously. I hope it doesn't in the same way as it has in the past. But:If stocks start out higher tomorrow, get to around 860 to 870 and then deteriorate.
It's very hard to outright"short sales" right here.Let's face it: The 850 level has held three times, and the 818 level held as recently as Thursday. Moreover, the one silver lining is that volume has been declining in recent days, as I can see in the chart,which is a positive.
In summary, the next couple of trading sessions will be very important. A decline below these lows, and particularly the 818 level, would trigger a lot of program selling and a total loss of heart among value buyers,as bulls throw in the towel. On the other hand, a move higher on Tuesday or Wednesday is something that should be watched very carefully as well. Initial upside targets would be 890, then 950, then 1000 then 1,150 and finally.... My expectation is that if we get that far, one of those levels will be sold hard and we'll ultimately end right back where we started, or worse.
THIS IS A GOOD TIME TO BE NEUTRAL,ON THE SIDELINES AND HOLDING CASH if you are new to market. More agile investors may wish to try to catch a big decline or advance. THOUGH VOLATILITY IS SO EXTREME LATELY THAT IT IS EVEN A TOUGH GAME NOW FOR VERY EXPERIENCED TRADERS.更多精彩文章及讨论，请光临枫下论坛 rolia.net