Looks like some sort of bear raid, or perhaps even capitulation is happening sooner than I thought. The mini-rally I thought that would come, did not. Interestingly enough, there was a little strength in the energy sector, notably natural gas- perhaps spilling over into alt. energy with LDK relatively unchanged on a day when the indices were screaming downwards > 4%. This break below the July lows should be confirmed (or not) tomorrow. Normally I would consider one close below a support a good sign of a break below, but in this volatile market, it may be smarter to wait for the second consecutive break below to go short.
A break below 120, it looks like we're headed for SPY 109, where it found support numerous times way back in 2004. That's another good 6-7% down, and considering how well the Taiwan markets are magnifying whatever losses are happening on Wall Street in their own markets, ^TWII could easily see the 5500-5600s again for their market tomorrow, and then follow through to the 5000 level in another week if the U.S. indice breakdowns are confirmed.
Be one, or a combination of these three:
1) Short
2) Cash
3) Fetal position, sucking thumb
There is no reason at all to enter long positions right now! Use any rallies to go short or exit existing long positions. If you're thinking about going long, just think of this bear, and what he'd do to your long position.
Although I've not yet been in the markets long enough to actually experience significant capitulation happening, but from the description, it seems like we're close- volume has been double the normal these past two days, and we're heading into an exponential downward curve.
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1 comment:
LOL. nice.
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