My conclusion is yes. I still think the market correction continues, but bulls are still in control[1] like last Friday. There are several things are worrysome:
- Bond market slump
- GM bankrupcy
- North Korea crisis ...
However, I still believe "Price makes news." The market will go where it need to go, no matter what.
From the above NASDAQ and S&P 500 charts, we can observe the following bullish patterns:
- Bullish flag in the making
- Higher lows so far
- Double bottom formed during the correction
- Volume shrinks during the correction
So far, I don't think the bulls need to worry. But, as a caution, IF
- SPX breaks down 875
- NAZ breaks down 1650
bulls need to exit for safety.
Pay attention to QID and FAZ, if market tanks again, they are good to buy in.
PPCO up 6.16% in a bloody market correction day, not bad at all. But still with low volume, may be a concern here. Keep watching. The inital call of PPCO is here [2]. The second PPCO call is here [3].
Thanks. Hopefully we can make a new high.
ReplyDeleteNice charts. Hope the market can hold the support line very well.
ReplyDeleteTA
I disagree. Market may collapse any time, sooner than you can think.
ReplyDeleteI'm going to have to go against many of the charts here citing too many variables outside of charts and the current charactaristics of how the market has been trading.
ReplyDeleteHowever I'm not counting out trends. Some people should really consider is Put / Call Ratios.
The last 3 times we hit the number we hit today 1.8+ has been:
02/05 - 1.82
02/24 - 2.37
03/03 - 2.13
From 02/05 went up for 3 days to 869.89 then dropped 12 of the next 15 days to close at 696.33 (this isn't even the March 9th low).
Today we hit 1.73 which signals people are starting to buy heavy on puts to protect the downside movement. This is a very bearish signal. To put it in perspective only 1 other day out of the 4 listed above (the 3 previous and today) hit or passed the 1.5 ratio mark.
Volume again was low, but on a down day which is quite compelling. I don't think big money got out, just people moving to bonds / money markets. With bond yeilds up, and a possible disaster of a 7-Year notes and the uncertainty of the 10 / 30-year note sales next week.. We may see a run to bonds at the insane yeilds they are providing. This run will kill the markets as people would pull out of equities to go into bonds and I imagine many will move retirement funds to money markets as protection (I know of a few that did 2 - 3 days ago).
I would much rather have a bull hat on, since the upside has more payoff (downside shorting the most you can gain is 100%). I just can't, I can't trust this run up, and I've made my money on the run up, and now it's time to let the private sector work on ITS OWN without government interaction.
The NAZ got saved by semi conductors today. If semi's weren't saving the day NAZ would have easily been the biggest loser for the day. Tomorrow may be a different day for the NAZ.. I think it'll lead the downers (unless news comes out or jobless numbers or MBA delinquent numbers are MUCH better then expected).
The news that will kill / save the market this week are:
MBA Delinquency Rates (Tomorrow)
Initial Claims (Tomorrow)
GM Bankrupcy (Any Day Now)
North Korea War or Nuclear Firing (Who knows.. then crazies are .. well crazy).
GDP Data (Friday)
I'm not going to pull charts for S&P and NAZ since that's your job :) ..
Ben, good point. Put/call ratio is very vital ..
ReplyDelete