Little air pocket. My SPX count:
geocities.com
It is, of course, not original. I should add that I think if we jello around in wave ii of 3 until after the Fed meeting, it would give us time to work off those puts bought yesterday. That would make today a headfake b of ii of 3.
Yesterday's P/C reading was very high (0.96 I think), but in a serious decline, it can remain high for several days. Readings like 1.05 used to mark significant bottoms, with days of 0.8-0.9 before the spike over 1.0.
Note also the global equity deterioration. Everybody else has tagged new lows. Throw in the dollar volatility and things are getting interesting. I bet more than a few players are caught upside down bigtime by the weakening dollar.
Without foreigners and J4P to buy stocks (and pay Wall Street's cut), and without insiders willing to step up, the buying will remain largely profit-taking - short-covering. Lower highs, lower lows, a gradual walk down until J4P or the Europeans decide there are better opportunities outside the dollar.
Not to water down the short-term message though: I think today is part of sideways-up jello, not the real thing just yet. I'm not one to dance on the tracks, though, so you know how I'm positioned. <g>
BC |
