What is VERY interesting about yesterday is:
1.First that the markets started with a gap up premarket 1.3% and ended near RED ,, so we had a major intraday reversal.
2. Markets came above 1300 for the first time for a long long time ,, potential a bull trap with retailers going long and feeling "safe" to go long?
3. AAII sentiment at 17% bears (all shorts covered now) and NYSE short interest at 7 years low,, this is crazy ,, its going to change very soon but I love it as it is one of the best scripts for another hard sell off coming...
4. NYA chart is VERY interesting ,, because yesterday was the FIRST TIME it tried to test the MA200 on the daily chart since the crash last summer ,,, we made a little test below it and then reversed to the downside... excellent spot for inflection point.
5. Remember the round numbers we had as I mentioned: SPX 1300 , NASDAQ 2400, DOW JONES 12.500 in all futures charts ,, will they hold ? Time will tell , but all in all I'm looking at this as a MAJOR top for 2012 and a great market decline is yet to come,, patience.
6. Financials clearly broke down hard as I called to short XLF and financials last week when XLF was 14$ , said to short JPM and Citigroup and BAC all down a lot since then ,, and imo much more downside to come.
Conclusion:
All in all ,, yesterday looks very much like a reversal day to the downside ,, time will tell but it smells like a bull trap just above 1300 ,, I stay extreme heavy short markets currently and holding all TVIX/TZA , both underwater a little bit but remember , those ones moves FAST when they go up ,, so patience will be the key to your profit $$$$$$$$$
Have a nice day
Sqwii a lot of people saying retail investors have left the market so the AAII sentimet figures are meaningless....any thoughts ? Sentiment sure doesn't feel bullish and fund managers still cashed up
ReplyDeleteChartrambler well you can always discuss this issue,, but either way it has some kind of affect as you can see based on history,, nothing is 100% right all the time,, simply nothing can be.
ReplyDeleteBut at least it gives an indication that being bullish now ,, you should be careful as too many might be on that side right now (So if its reliable or not? Well ask AAII or other ,, I think what they do is reliable enough) more than what "other" people tell you.
absolutely....and there are other indicators suggesting caution.Wold be nice to see BPI reverse though.Excellent blog btw
ReplyDeleteGreat Vix chart there Sqwii.
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