CBS MarketWatch Is calling Sept.1 a BOTTOM!
I somehow doubt it, unless it means a two-week bottom. The market is still swinging back and forth at an exceptionally fast rate and the amplitudes of the swings are still increasing. Until that changes, any call of a bottom is premature.
The present situation is quite similar to the situation two weeks ago, except that the volatility has increased. We have a similar bearish chart pattern, most likely leading to another big move down. It may be a bit premature to call the latest rally failed (needs confirmation tomorrow), but let's assume it for the moment:
Then, we had three important rallies in the present downturn that tell us something about the market sentiment, the selling pressure: the Clinton relief rally, last-week's bounce, the interest-rate-hype rally. They lasted 2 1/2, 1 1/2 days, and a bit more than a day, respectively. Not a promising pattern. The Clinton relief rally occurred a few days before 1055 broke (the first crash signal). What would the next key level be? Presumably, a day ending below last week's lows (7400 Dow, 940 SPX), or at least below the 20 % decline line. Could certainly happen within the next few days. Likely triggers? I go for Russia again (the probability of a military coup has become somewhat significant), but perhaps it is Clinton.
Anyway, it remains interesting.
Phil |
