Monday, June 15, 2009

Trendline Breaks, More Declines to Come; June 15, 2009

The S&P futures finally broke and closed beneath the ascending trendline established for months as shown above. This is what I've been saying would signal the next significant decline phase. This, combined with the very weak breadth as more than 93% of NYSE stocks traded to the downside and almost 5 1/2 stocks traded down for every 1 stock that traded up. Volume was a bit light but that just opens the door for more sellers out there to come forward and push this market down. All this evidence suggests that the buyers have become exhausted and there really aren't any more out there at these levels.

Expect the market to decline to the 880 futures level at least with last week's highs remaining intact.

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