The Dow may do that test tomorrow. Have you been looking at the after hours action, with Intel disappointing? It's put the tech sector even farther down the toilet than it was at the close, and appears to be taking the rest of the market with it.
The levels you highlight are indeed technically important. The psychological implications of a breach of them is widespread recognition that nothing is immune from the credit crunch. Even though LIBOR is somewhat back in whack with the Fed Funds rate, the pile up at the exits could get ugly then.
From the perspective of market psychology, there are several more important earnings reports to come in. Tomorrow we have JP Morgan, Wells Fargo, & Northern Trust. The latter won't matter much, probably. But WFC & JPM are crucial, and misses and or gloom from them would almost certainly start the next big downleg. Whisper numbers for both are above consensus, but that was the case for Citi, too, and look what happened.
Personally, I rather hope they are upbeat, and the market snaps back a bit: I cashed in my Spyder short today and am simply long some biotechs. Any rebound, and I'd restart the short.
But you prefer breakouts, right? I give you SKF.
Cheers, Tuck |
