K, well I guess I will participate because it's fun having the opposite view. I happen to believe 100% we will break this 1040 level and then again break 1000.. I see the real 'second bottom' being in the 9 or 800s on the SPY. Hows that for a call?
Chicago PMI due out in 5 minutes, the bulls will want something above 60, anything below the estimate of 57 and the sell off continues consumer confidence due out in 20 minutes as well, a drop below 50 and the bulls should leave the day to the bears.
Here is what I figured. Look at the AAII sentiment. Its at a low. I think everyone is getting real short right now and expecting there to be a plunge. What if the plunge doesnt come then there will be a lot of short covering followed by momentum buying... http://www.tradersnarrative.com/sentiment-overview-week-of-august-27th-2010-4606.html
Could be. But that's predicting, always disastrous to one's trading account over long enough time line. True, sentiment is back down to past IT (intermediate term, +/- 50 point swings +) but...sentiment, as well as overbought/oversold, are only CONDITIONAL FACTORS. One should only use them once trade set up is in place for gauging potential thrust of a move...
haha. I try not to put that much thought into it. I just make a simple observation, make my move and then thats it...
That being said, I do agree that a rally is likely to take place. But me thinks it will be shortable...how many perfectly aligned triple bottoms have you seen in your trading career? ;-)