OT: Jacob I am nearly 100% in cash. You see despite the fact that I am 95% certain I am right that the market has further to fall I am an optimistic bull at heart. Most of this post is a rewrite of one I wrote yesterday but I have provided chart links that should be helpful.
The SOX chart you looked at earlier today is in the process of fulfilling my expectations. A lower low today. the SOX lost almost 3%. In my opinion we may have a couple of 5% loss days coming up as we head lower towards that Bollinger Band at 254. Yes we could stop at 258 perhaps but a penetration of the lower Bollinger Band on the SOX may be the first comfortable spot from which to be long for a rally.
But will that be a true bottom? Nope...
Not unless we see the VIX close back over 50.
At that time if we have a true bottom then the SOX will have an RSI of 30, or below, on the 6 month daily chart after having penetrated the lower Bollinger Band several times.
stockcharts.com[h,a]daclyyay[pb20!b50!b200!c13!c20!c50!i!d20,2!f][vc60][iub14!la12,26,9!lg!li10,10!lh5,5!lp14,3,3!ll14]
The BPNDX will be below 20 again.
stockcharts.com[h,a]dallyyay[de][pi!a20!a75!c20!f][vc60][iLg]&pref=G
The number of bears in the newsletter writers investors intelligence survey will at least outnumber the bulls and perhaps be as high as 55%. They are rising you know. New numbers out today:
schaeffersresearch.com
The equity put to call ratio will be over 1.0 on several occasions within a few days of each other.
cboe.com
stockcharts.com[h,a]dallyyay[dc][pi!d21,2!f][vc60][iLg]&pref=G
And finally declining issues on the NASDAQ and DJIA will outnumber those making gains by well over 10 to 1 on high volume for that particular point in time.
Now if these sentiment and technical indicators reach the levels I am hoping to see some time soon then I will happily put my cash to work by going long at least for a while. Unfortunately for right now I don't think even a rapid conclusion to the situation in Iraq will end this bear market but I am willing to trade the next bottom which is not here yet on the long side.
RtS |
