Solid or intermediate low: that's still unclear. Some of my indicators are not mathematical or TA, but are simply unfolding events as they arise.
If it's an absolute bottom, my indications are that Thurs/Fri will provide the intraday low point. But I'm now leaning against such a bottom in June.
A protracted slide after FOMC meeting, to a mid-August low, appears most likely at the moment. Principally because of the gold factor.
I can see golddiggers being manipulated down and suspect the CBs are behind it (and key brokers, like JPM) because they have to buy the stuff to cover their butts and it's too spendy right now.(see Calandra's column at MKTW)
The decline in gold prices will impact market sentiment to be more bullish with equities. But once the CBs buy, it will spike again. And equities will fall.
Currently, the VIX and VXN are not even close to where they'll be. If gold continued its rise during this stock decline, we'd see volatily creep up steadily like Aug/Sept last year. For now, I look just for the gap close in the VXN chart... about 55 and we hit 53.45 today. I see 1460-1480 as our intraday low next week.
But I'm taking it day by day now. Anything can happen in the next week and I'll be exiting to 100% cash Monday.
Right now, one of my indicators is MSFT. It has serious resistance at 54, 56.5 and nearly impenetrable at 67.5. I think it'll see 36 and maybe 30 this year, before the bear gets run back to the blueberry patch. MSFT and NASDAQ are closely aligned chartwise.
There's one other factor that eludes me as yet. The Dow is way outperforming MSFT and NASDAQ, and since early February. It has, in my estimates, much further to fall, posing greater risks than tech right now.
So what could drag the Dow down further, percentagewise, than NASDAQ? I have to study the Dow weightings more, but I suspect the price of oil is key. Can we imagine any scenarios for rising oil prices? Mebbe rising interest rates (I think HOV may be 2-3 pts from a peak right now) could do the trick.
The only thing I see to sustain a second June slide scenario is the number of new issues - ipos - being floated. But I'm trading gingerly at present, as the market and the paths of equities don't always align.
Is it coincidence that equities and inequities are opposites? <GG> |
