I agree. I frequently look at the VIX and it has been indicating complacency so near to a key support, even though the patterns of selling have still remained intact. I am anticipating a move down for test of support and then a bounce. What is questionable is how far that bounce will follow through. Looking at the SPX, first support at about 1370.50, next is at 1346.50, and the most significant at 1325.00. Note that the SPX does not have much more down to go for its first support nearby which would be a small test of bottom coincidental with a larger test of bottom. What is interesting is that the NDX is already at significant support. So this supports what Don was saying of a possible rally without testing that 2900 to 300 support that he talks about.
Here is another angle. I find contrarian thinking works best at extremes. But at the same time, when something is well anticipated by others, where this means the general public, then would could happen can end up actually happening, but with a twist. For example, a well-anticipated H&S can still resolve. But price then can reverse as well-before its target faking people out on the break. This leaves the most players in the wrong position. In this case, this can mean either a surprise bounce at this point, or more interesting and IMO a bit more truer to form, a move down to test support, a bounce up long enough to attract money in the market, and then a continued sell off finding traders on the wrong side. But I think either scenario is a possibility. For price technically speaking is at a notable juncture right now. I wonder how well this is supported from a look at individual stocks?
Just some thoughts.
Bob Graham
PS: Isn't this talk of "predicting" the future fun? :-) |
