The key question going forward:
Either the market can carry on with its bumpy ride and grind itself down to a bottom slowly, or there can be a swift and decisive capitulation.
My sense exactly.
here is a full excerpt from TSC
The short-term outlook is patchy. In general, Wall Street's technical analysts, such as Jeff deGraaf, chief tech analyst at Lehman Brothers, are anticipating a continued bumpy ride. "We have been looking for a technical trifecta," he says. "Our concern a month ago was that complacency needed to turn to concern, then concern to turn to capitulation. We've seen the step from complacency to concern, but we haven't gone from there to capitulation yet."
There are two options for the current market going forward, says deGraaf. Either the market can carry on with its bumpy ride and grind itself down to a bottom slowly, or there can be a swift and decisive capitulation. "I use the analogy of a sponge that absorbs all bullish expectations: It can dry out over long time or it can be squeezed out, and that's capitulation. If you have capitulation it tends to wash out the system." At that point, the market bottoms, and the recovery may begin, he says.
"The question is still out there, and no one can answer it, if we're in for a continued bumpy ride or if there will be capitulation," says deGraaf. "I think we still have some bumping to go because there are still some excesses in the system that need to be wrung out, but the end is getting closer." |
