Friday, December 19, 2008
Daily S&P Bearish; Dec. 18, 2008
Just wanted to take a minute and step back to look at the bigger picture and keep focus on my main projection; which is that the stock market will fall to new lows on the year in the coming weeks. The chart above is a daily S&P futures chart that shows a rally very hard faught with overlapping choppy waves which is clearly a correction, not a trend change. Also, the daily stochastics have been in overbought territory for a while and keep trying to cross down.
This all tells me that the market will sell off hard pretty soon. The hard question is when? and how much higher does it go before it does sell off? All I can do is look at the short term structure and try to find 5 wave drops and rallies. So far, I find none either way.
Despite the fact that the near term is unclear, I want to make sure I don't lose focus of the big picture above; which is that the larger trend is still down and that we have new lows to achieve on the year.