As called yesterday - markets dropped like a rock with DOW below 12.000 and SPX below 1300 and with Russells down near 3%.
What a BIG FAT red day and a very sweet day for our shorts from 1333-1330. The markets broke the uprising bearish wedge which I told about - and for now looks like we could drop pretty fast. But I wanna mention to you that we should see some "contra trend" rallies to make all the bulls buy the dips everytime....and then plunge back further.
The dollar bouncing big off my trendline as called 76.3 and witht the dollar going higher - the markets going lower (Expected this to happend - and just beginning)
SPX and QQQQ broke below MA(50) and CLOSED below this level - this does not bode well for the bulls. I still believe we see below 1200 by end of this month with lots of contatrend rallies and then sharp pullbacks from these. We still have Portugal debt problem and they really need a bailout SOON.... also US debt problems with budget and more problems in Mid East.
For today I expect another red close - cause no POMO today + Saudi Arabia day of Rage and I think we could see below 1294 sometimes today very likely.....
Overall the short term trend is still down and we wont get bullish before SPX moves above 1316 at least. Until then the trend remains down and tells us to SHORT, so we stay short heavy.
But after such a big drop tomorrow , would not be surprised if we are going to backtest the supports over next days - but have a feeling that we could close red another day today and confirm a big red week on weekly chart.
Have a nice day and weekend
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