The markets opened on a mildly favorable note in the wake of Friday's afternoon bounce and talk of a gov't plan to takeover C's bad assets. That quickly turned into a head fake with a steady slide into midday resulting in a breach of Friday's lows and the underperforming Dow dropping to its lowest intraday level since Oct 1997. Minor consolidation followed by more afternoon selling and a weak close.We are extremely oversold and normally we would expect to get a technical bounce soon. However, with all the rumors and speculation, I'm not holding out for much of a bounce until the failing bank crisis gets resolved.
As for the big picture, I see an inverse H&S pattern taking shape on the SPX weekly chart above.
Stocks reporting earnings in pre-market: FWLT, M, TGT, HD.
4 comments:
I think 7K on the Dow should be first important support line. If that breaks too, we keep going lower. S&P already broke past 750. Scary times.
Btw i was wondering if you care for a link exchange, so our fellow readers can enjoy each others post..
my blog: http://rantaboutit.blogspot.com
i have already linked your blog.
Let me know.
"Inverse head and shoulders" ...that'd be a good scary shake-out of a head if it forms. And, with so much pessimism out there, your optimistic scenario may come to pass.
But politicians are now running the economy - maybe we're not pessimistic enough.
SJ - linked
John,
Exactly, inverse H&S is my optimistic view. You can look at my pessimistic view of the S&P double top - monthly chart and 50% fib. ext.
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