Friday, May 18, 2012
Bear Market Prelude
This is bear market action. Something feels different this time, the fact that we don't capitulate, we drip down in drabs with traders playing for a bounce and hoping for a rally to sell into. This never happened in the selloffs in 2009, 2010, 2011. We always had quick selloffs with big down days thrown in regularly. And the selloffs were never this calm and collected and continuous. We are down 120 points in 2 weeks and there is no capitulation. No really big selloff days, limited volatility intraday, just steady selling with rallies dying within hours, not even one day. I think we have to get down to 1260 before we can get a real bounce. The bagholders are just weighing down on this market and the smart money is steadily dumping their holdings.
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5 comments:
Correct, sideways next week, so it will be choppy. Retest 1340 around end of month then we accelerate this decline into July - August time frame.
There is no way in hell short of QE3 taking this market to 1340 by end of May. No way. Maybe if we get fear and bottom in a week or two, then we can get to 1340 by the end of June.
1320-1340 watch the declining 8 and 13 EMA. Market is following a pattern.
Call me Captain Obvious, but I only see one market pattern currently.
DOWN. Every day.
The pattern you are observing matches my analog. Down trend. The depths of the down trend will take many by surprise. The analog says we will go sideways this week, with a small pop early in the week, then choppy making a low on Thursday, then another small pop on Friday.
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