Just spent the last hour going over my charts. I have also had a chance to read some of the more popular sites on SI to gauge market sentiment overall. There is a lot of agreement that this market is going down, which actually is kind of troubling. It would be much better knowing that your analysis is going to require you to swim upstream against the popular point of view. Nevertheless, I have to stick to my original call that this market has set itself up for a really ugly drop in the weeks to come. Will we get it? Especially if the FED decides to act early. Once again only time will tell. Although I don't know for sure, I have to take the "setup" that I'm seeing very seriously. I have to let it be my guide when trying to read the "message of the market." (thanks Ron<gg>) What adds weight to my point of view is the current chart condition for everything else out there. The RUT, S&P, INDU... everywhere I look I am seeing prices in trouble. GE, GM, SUNW, MSFT, SFA, CIMA, IDPH, KLAC...semis, autos, bio-tech, small caps. Everywhere you look things look ugly. So if this scenario plays out over the next couple of weeks there won't be many places to hide.
Fortunately for us things are going to play out in the shortest of time frames. All we have to do is watch how the market responds to an early FED easing (especially the hours after the move), or by no move at all. Either way we get a sustainable rally, or investors panic on the realization that this time the doctor is too late in prescribing the right medicine. My work tells me that the latter has a much better chance of playing out. If the market does start selling off I believe we'll have a good chance at 1300 on the NAZ and possibly 8500 on the DOW by the end of March. Of course these numbers could be way off. But I arrive at them by some simply measuring tools that I often use. The numbers really are not important. I would be more concerned with getting the direction right and being as nimble as possible. The same applies to a bullish reaction to any Fed easing. Volatility will once again be the word of the day. |
