As widely expected an green UP day on Thursday with holidays , but the fundamentals and economic problems in EU , Japan , Mid East are still there and markets ignored it yesterday. But after all markets were very oversold and overdue for a holiday bounce....
Well markets did get a bounce but VERY weak bounce where the small caps did close near flat (only 0.22 % up by the day ) and other indexes only up near 1%.
SPX reached the target I told about around 1275-1280 and closed 1273.... I hope you got added some shorts.
The USD really needs to breakout - to me looks like a "wash out" and take the stops below trendline before rally big to 87-88 level..... so watch out , all headlines telling me "USD about to crash and so , sentiment is VERY low" and the euro is facing BIG problems near term with Portugal and Ireland and Greece. I guess next week will be all about Euro debt countries or lots of the news WILL be... and I can easy see the euro plunge back down below 1.3$ pretty fast with the markets plunging down further.
All in all , the bulls did not make any good moves to the technical picture. The short term trend is still down and will continue. The upside resistance to watch it 1298-1303 area - EVERYTHING below this level is a big fat short - if we rally more today (which I dont think we will.....) then short all you can if we move closer to the resistances.
But all in all , looks like we could really break down hard today, also with the problems in Libya.
I'm looking for a clear breakdown of 1250 level next and I dont think you have seen the "big selling yet" , which is to come. Think about it - when Japan have problems + Libya fight or Mid East problems + US debt problems need to be solved soon + EU Debt countries next week needs to find a plan - well all in all a good coctail for a crash type of move.
So no reason to cover shorts , long the USD and short the markets since 1333-1330 and waiting for the big sell off to come near term. If you were short when my signal gave us , you would be in some FAT profits right now - but I would recommend holding all as there is no signals which looks bullish to me and downtrend still intact , with every bulls trying to buy the dip....but will get screwed again.
Have a nice day
The probability for a crash is very high....I just hope it won't be a 30% one day event....but more like ferocious selling over a couple of days
ReplyDeleteI dont think it will be one day event - think it will be a slowly grinding move lower as we have seen last days and weeks , with contra trend relief rallies because all people trying to buy the dip , but will get screwed with markets moving lower.
ReplyDeleteButwe could easy see a -3 , -4 % move if we break below 1250 imo
ReplyDeleteHi and thanks for this blog-ive seen your posts at Xtrends. Question-the RUT was pretty strong toda-im long TZA-any comments?? Thank you!
ReplyDeleteHi John and thank you
ReplyDeleteI am still long TZA (means short Russels) and really no reason to cover them , we are still below major moving averages and the buying comes in at OPEX which is manipulated. Next week or this upcomming week could be a big red week for equities very likely imho and wave 3 is to come down.
Hold on to your shorts , as long Russels dont breakout above 800 with strong volume no reason to cover.
short term the dollar might rally into the 80ies but im definitely not holding USD long term. i think the US debt problems gona be a lot uglier than the ones we have here in europe. im pretty sure the fed is coming with QE3, and the dollar might make it into 2012 but sooner or later u'll get the bill of all the borrowing from china and the reckless spending in the US. btw so far u were spot on about the SPX decline. lets see if we get to 1200 by end march - early april.
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