P&S and STO Death Blow's Message Board

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Strategies & Market Trends : P&S and STO Death Blow's

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To: Justa Werkenstiff who wrote (9502)	10/6/2002 8:49:33 AM
From: sun-tzu	Read Replies (2) of 30712

Caution JW. Basically, we're getting an internal correction off oversold conditions daily. As the downtrend continues, the market can remain in oversold territory secondary to the intraday short covering spikes. The mammoth 350 point spike had barely enough traction to last 24 hours. This argues to the strength and voracity of the current downtrend. Yes, each day we approach a meaningful IT bottom; however, we have not fulfilled some of the basic parameters of that type of situation. 1) VIX spike...this should at least approach the 60 readings of 09/01 and 07/02. Of note, the nasty declines recently have been but a blip on the VIX radar. I counter that this actually represents an unusual amount of complacency given the indices recent and significant breakdown of support levels. 2) Down volume/Up volume of 9:1...it just hasn't happened. Typically we would see a few of these prior to any meaningful rallying point. 3) P/C ratio reaching extremes. It came close last month but there was an unusual amount of index arbitrage skewering the readings secondary to triple witching expirations. Hence, the reading over 1.3 dropped to a benign .66 the trading day after expiration. 4) Bull-Bear sentiment should at least equal zero. It has recently moved in the opposite direction despite the breakdown of support on the Dow and and Naz. Are people waiting for the S&P levels to hold and rally around a successful retest? Perhaps, but if that support falters, then we really should see the selling intensify and at that point, I think 1 through 4 will align. martincapital.com Bias remains to the downside imho but certainly caution is prudent. I think the final rush of this leg will be more intense than most people suspect. Hope all is well, (~)^(~)

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