Today will be an important day. We should get a decent
rally, possibly explosive in the large-caps, but the strength
of the rally and the point when the sellers will start should
tell us something about the relative strength of buyers and
sellers and help us to gauge the near future. My guess
would be that we will see a decent rally in the morning, but end
the day flat or slightly positive (~50 Dow).
Comments:
There is an amazing amount of bullishness on this bearish thread.
Bobby: what is a "million share capitulation"? Surely you mean
"billion".
James: I would not be surprised to see 5000 (Dow) before the end
of the year, in particular if the correction comes in two legs,
but I doubt that it will stay there for long. I am mildly
optimistic and would expect a Dow of 7000 - 8000 by year's end;
still highly overvalued, but the fundamentals are still o.k. And
a Dow 7000 won't affect the fundamentals much. In that respect,
I think it would be rather healthy for the market and the economy
if investors' expectations became more realistic again.
Dow or SP500? Many TAs on this thread use the Dow instead
of the SP500. Why? While I agree that the Dow is the more
important headline index, from a technical point of view it
surely must be the SPX. In support of that statement, I would
say that the SPX chart is much clearer than the Dow's and support/resistance levels, trend lines in the SPX seem much more influential (my impression). This is kind of relevant now,
since the next strong support level in the SPX below 1060
is a long way down (around 990).
Good trading to all,
Phil |
