Wednesday, February 4, 2009
The above S&P 1hr futures chart shows the rally possibly over as it bumped against the 61% fibonacci level and reversed this morning. Plus, as you can see the MACD is showing a bearish divergence as it never made a new high after the initial surge early Monday. So far, there is very little follow through from yesterday's big rally. Plus, yesterday's breadth was not impressive at all with not even 2-1 NYSE advancers to decliners and now today's rally has the same composition. Also, I noticed the last two huge selloffs were preceded by a huge astonishing surge in the Nasdaqs a few days prior to that happening. Monday and today have seen the Nasdaqs absolutely surge just like the times before. The setup is right, a top is in, or is coming very very soon and a massive selloff that should easily break right through the 2008 lows is coming.
I'm fully short right now.
Monday, February 2, 2009
Not much new to add, the bigger picture tells me quite clearly that new lows beneath those established in 2008 will be broken, most likely in the next couple weeks. The 15min S&P futures chart shows a clear corrective looking rally which means 805 will be broken at a minimum. With the larger picture so strongly bearish and heavy heavy capitulative selling just over the horizon, I'm shorting this rally with my remaining available cash.
Again, the S&P cash index low of 740 will be broken soon, most likely within just a few weeks.
A top is in the stock market and 876 S&P futures should be tested at all before 2008's low is broken. The wave count suggests a 3rd wave could be unfolding now. So I'm aggressively short and will add to my short on rallies until 741 S&P cash is broken.