Was this a “good” week for the markets?
Yesterday morning I put out an Alert to Membersregarging our level watch: “Keep in mind that our 2.5% levels represent a 5% run from the bottom since last week so it’s natural that we get a 1% pullback from there so the key is to hold the 1.5% line – THAT will be our bullish indicator:”
- Up 2.5% (we hope): Dow 10,455, S&P 1,100,Nas 2,255, NYSE 7,000 and Russell 650
- Must hold at 1.5%: Dow 10,353, S&P 1,086, Nas 2,233, NYSE 6,902 and Russell 644
- Middle Range (MUST hold): Dow 10,200, S&P 1,070, Nas 2,200, NYSE 6,800, and Russell 635.
As you can see from David Fry’s SPY chart, it was an interesting day and we did pull an aborted stick into the close which kept us over 1,100 on the S&P and 7,000 on the NYSE and , as you can see, our 1.5% lines did pretty much hold up as a bottom test, other than the Russell, which we had already given a pass to inthe morning post as they’ve been so pathetic we’re just proud of them if they try.
We had shorted PCLN in the same Alert (congrats to all who took that one!) and the inventory report chased us out of our upside oil plays (but not nat gas) at 11 and that initiated the market slide along with, as Dave notes, a poor Treasury Auction that finally got TBT back over $33 (I had also mentioned shorting TLT several times in the past few weeks). Is this the beginning of the end of the free money express – stay tuned for more action next week!
This week’s action isn’t done yet and we still need to hold our levels. As I said yesterday, the best time to take disaster hedges is when we’re testing our 2.5% tops, as we were in the morning. The Dow topped out just over 10,455,tested it until about 12:45, then failed BEFORE the auction, the S&P topped out at 1,110 and held its 2.5% floor, the Nasdaq hit 2,255 on the button at the open, the NYSE also held their 2.5% line as a bottom, and the Russell fell hard but then played around the 635 line in the afternoon so we continue to watch and wait on that one.
I am not TA guy but If I were a bear, I’d be pretty darned concerned about the charts as it looks to me like the 20-day moving averages are registering a short-term mistake in a…
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