Tuesday, January 27, 2009
One Last Pop Before Doomsday; Jan. 27, 2009
The market has been trading choppy and sideways and I've been patiently awaiting signs for a top to be in. I don't have them yet, but suspect they'll come soon, perhaps this week. The chart above shows the clear decisive smooth selloff downward and the very hard faught choppy modest ensuing rally. This screams out to us that the trend is still down. Losses are easily acheived, while gains are hard faught and barely achieved at all.
The big question is when? Well tomorrow the Fed meeting results come out, whoopty-doo. But as usual, people buy into the Fed meeting, and looking at the rally in the futures right now, this meeting is no different. Interest rates are essentially zero so I don't know what all the fuss is about for this meeting other than it's speculators pushing the market higher only to sell as usual shortly after the meeting. The bottom line is that this rally we're about to undergo should be short lived, and I'll be aggressively shorting it the whole way up. Once it tops, which could be in the S&P futures 865 area, it will lead to the next wave of fast and ferocious heavy selling.
The short term picture is unclear, what is clear is that this rally is a correction, and that the S&P low of 740 will be broken in the coming weeks.