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Monday, November 17, 2008
Going Down
Today's weak close after what looked like a high volume rally is a bearish development. I think it means that the e-minis are headed below the 800 level.
We may be setting up for a divergence with the Nov 13th SP500 low / VIX high. A jump higher in the VIX will eclipse the Nov 13th VIX high but may not see the SP500 breach the 818 low. This would be similar to what we saw for the SPX vs. VIX for the Oct 10th vs. Oct 24th dates which led into the Oct 28th 11% rally for the SP500
SPX does not look good right now... This is the 4th time it is testing the 840-850 area and has always bounced and then stair step its way down again... This should be the time it breaks down and closes 750-800!
If SPX closes 800, I think we will retest the 2002 bear lows of 750 and could go further down to the 650-670 area.
This is a vicious bear market with no end in sight. Alot of bad news is being priced into this market as is usually the case. Bull markets usually over extend and Bear market usually breakdown further!
Be very careful, it can get ugly, and I still have not seen a complete washout day (capitulation) to signal a bottom, then again I am no pro!
3 comments:
any chance we might crash?
Rick B
We may be setting up for a divergence with the Nov 13th SP500 low / VIX high. A jump higher in the VIX will eclipse the Nov 13th VIX high but may not see the SP500 breach the 818 low. This would be similar to what we saw for the SPX vs. VIX for the Oct 10th vs. Oct 24th dates which led into the Oct 28th 11% rally for the SP500
SPX does not look good right now... This is the 4th time it is testing the 840-850 area and has always bounced and then stair step its way down again... This should be the time it breaks down and closes 750-800!
If SPX closes 800, I think we will retest the 2002 bear lows of 750 and could go further down to the 650-670 area.
This is a vicious bear market with no end in sight. Alot of bad news is being priced into this market as is usually the case. Bull markets usually over extend and Bear market usually breakdown further!
Be very careful, it can get ugly, and I still have not seen a complete washout day (capitulation) to signal a bottom, then again I am no pro!
Good Luck
ex
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