Things do look grim, but I have not shorted recently because of extreme oversold conditions on Naz. Nothing goes straight down, there should be buyers at 1900 or so. Unless of course we have the bad luck of being at the abyss right now, where technical analysis gets thrown out the window in a selling frenzy. I have seldom been more unsure of where we will be a few weeks from now.
The inability of trend lines to hold for tech stock after tech stock is amazing. The smart shorts covered near 2150, and it was a pathetic bounce.
There is a contingent of professionals that thinks it is no different this time- the fed will ease, and look past the doom and gloom, play the business cycle, buy into the weakness here in select sectors. That may prove to be enough to support the SPY here.
The Naz is just a wounded animal. I am sure this is just one unbelievable nightmare for many people out there, and the game is far from over. Just when it is darkest, the Naz will bounce, and crush a few more people. Take your pick:
1900, 1750, 1500, the lines are there, place your bets in the biggest casino of them all. |
