There's the usual technical argument of an 'oversold' market along with broadly positive earnings, however, subprime et al, Walmart, Home Depo, etc. negative news -- with some rather ominous scenarios envisioned -- is pulling in the opposite direction. Is the market nearing the point of a rebound, or does it have much further to fall with possibly even worse consequences, e.g. a sustained bear market of at least a number of months?
why are so many worrying after the markets have only gone straight up for the last 5 years. LOOK at QQQQ, bottomed 18-20 around 4.5 yrs ago, ran to 50+ How greedy does one have to be. The bull market needs a rest, the bear will eventually make its way to wallstreet.
The first leg down off the highs was 128 points. If this second leg down EQUALS the first, it would target 1375. (1503-128= 1375) A .618% fib of the first leg down (128) would = 79 handles and target: 1424
The Dow closed with an "official" head and shoulders which doesn't bode well for any potential rally. It would be surprising if there wasn't some buying at the 13000 level though.
H&S are consolidating patterns and not just market top or bottom patterns alone. How do you know if this is a top pattern or consolidating pattern
Yes, a rebound tomorrow that will be mostly short covering in the morning. Wednesday will close up 70 in the DOW. Thursday will close down 50. Friday will be huge for the bulls on option expiration day. Permabulls and media will get all excited thinking were out of the woods. We close at session highs. Hurricanes, Asia problems, geopolitical problems,etc. over the weekend and we open Monday down hard for the next leg down.
1st h&s was also breached (although, I'm not certain what an "official" h&s is, this is my subjective interpretation). However, admittedly, 1st breach also returned back above on hammer that time. What baffles me is isn't OE a few days away? I just wonder whether all the bearish put holders are going to triumph, when a strong trading range boundary has been established over the last few months. There are an enormous amount of puts at 143-145 area (SPY) and 130-135 (DIA, though not as lopsided as SPY). Does it seem likely that an avalanche will break through that range and the bears will see riches in three days? Anyone else have any thoughts on this?
My only thought is that I would be a buyer at around 13180, looking for the rush rejection through 13200, and hold until things don't look so good. Or, I would certainly buy on any gap below 13K if it looked anything like a gap and crap (maybe 3 ticks above open after 1st 5 minutes, or a new 5 min high.) I think 13K holding (for now) is a very good bet.