Sunday, July 12, 2009

Looking for a small bounce still...

This is actually an edit, I was looking at the futures just now and noted there could be a little downside at the open...then I expect a break out of the descending wedge to a fib retrace. The chart shows a 38.2 retrace...but if it takes a little longer a 50 retrace is not out of the question as the green trendline will have crossed it. the green line the neckline or is it the redline? I am looking for a bit of a retrace Monday before further downside. I would not add to my shorts until another bounce. Watch for a break of the red dotted trendline. If that goes there might not be much of a bounce.

Vix has retraced a bit even though we have had down days. I am looking for it to bounce off the 20ma of the BB band before advancing further.

Finally people have become at least neutral instead of bullish. Sentiment is starting to shift. The jobs numbers have been particularly bad.

For the intermediate term, I expect the market to test new lows before the end of the year. We will watch this for the bottom:

Yet another edit. A friend ask me a something on facebook and I went off on a little rant:
I see lots of undue optimism that the people in charge now have already/will solve all our problems. Just on a simplistic level we are running much worse than the "More Adverse" scenario the government had for the bank stress tests. Those stress tests turned out to be fairly bogus anyway as the banks could "negotiate" how much money they announced ... would be needed. Even so, the economic numbers are running much worse...but who now even remembers the bank stress tests? For a good while the news has all been "green" shoots...we saw a bounce in a lot of core numbers and the rate of weekly jobless claims was decreasing, but thats only a bounce. U.S. overall is in bad shape and relying on others to fund its spending...and when others don't come through...we will buy our own debt. The fed is buying treasuries to keep down long can that last?