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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: James Hutton who wrote (186085)	2/24/2009 10:07:12 AM
From: MulhollandDrive	Read Replies (1) \| Respond to of 306849

i'm seeing complacency considering what happened with the market yesterday www.swingtradeonline.com/members. Crashing Out... There is no other way to say it. The Dow crashed today. Took out the 2002 bear market lows at 7197 and took out the decade long trend line support level. This is very serious stuff but how much can we take from the Dow any more when a lot of the stocks in it are trading under $10 per share. It's a broken index and the main focus has been and should continue to be the Sp and Nas but you still have to respect an index such as the Dow when it does what it did today. Today started off on a bad note with a gap up based on the Government saying they'd support C and Bac. What? We didn't know that before. Anything to try and get a rally, especially at oversold. But you're probably asking me, why bad news on a gap up? Because markets do not bottom off of gap ups but from gap downs. The hint to all of this being the recent terrible advance decline line prevalent on all late day moves off the lows which I have harped on continuously. The market will bottom when all of the following take place. We gap down and reverse hard in price and that price reversal is confirmed by a great advance decline line and massive volume. Without those two elements supporting price reversals you can forget about them meaning anything whatsoever. So the gap up failed and we headed lower slowly but surely. We headed back towards that support level of 7200 and had a few bounces that went basically nowhere. A red flag. We broke through and the Sp, most importantly, headed down towards 741, the make or break for this market ultimately. 742.37 was the low but we closed at 743.33. Not much to get excited about. The selling accelerated all day long with almost no attempts to rally once 7200 went away. Volume was only moderate which means no capitulation but that's something you'll see in reverse when we get the gap down reversal some day. Bottom line is the market crashed pretty much today and didn't do so in a way that says the bottom is in quite yet. Here's the thing that absolutely blows me away personally. I have been a student of the market for a very long time. Well, not that long. I'm not that old yet. The put call ratio today stayed under 1.00 all day except the open. HOW IS THAT POSSIBLE????? Are you kidding? Here we are crashing out and losing massive support on the Dow and nearing the make or break one on the Sp at 741 and no one is afraid? WHAT???? Where were those amazing fear readings of 1.6 to 1.9 or even more? Under 1.0? It says the market players think it's their right to rally, no matter what's going on. There will be a rally and that's that. No need for fear. Well guess what? Yes there is a need for fear. Big time fear in fact and we just didn't see any today. Based on the market action I would call today a day of massive complacency. Just unbelievable!!! Bad news for the market. Who knows, maybe tomorrow. So what about those internals that I focus on so much. Let's see how they did today and see if they confirmed the massive down side action and breakdowns that took place. Sadly they did confirm the move lower. Volume was moderate but the advance decline line and new lows to new highs tell the true tale. The Nyse had roughly 6 decliners for every advancer and the Nas had basically 4 decliners for every 1 advancer. There was a total of 914 new lows and 12 new highs when you combine the Nyse and the Nas. 75 to 1. need I say more. Confirmation for sure. No bullish spin Doctor game to be played here. The bears score a 1st round knockout here. This is the type of stuff the bulls will need when we get the right reversal in place. We now need to focus on the key levels of resistance on any counter trend rally that may evolve from oversold before we get the more important reversal after a gap down. Hopefully we'll get the gap down first. If not, and if we just rally some from oversold, there is resistance at Sp 775 up to 805. That will be a very difficult level for the bulls to penetrate on any rally attempt. On the Nas the level is 1400 up to 1475. For these levels to have any chance of being taken out they will need a bad gap down that gets bought hard the way I've explained it needs to be. If that takes place then you can get enough momentum to take uot the shorts for a while but there's too much unknown here. Bottom line is now we know where tough resistance sits and it's at 775/805 Sp and 1400/1475 Nas. The Dow is not even worth talking about but if you inisit, 7197 is first then around 7450. If we want to get silly, we can focus on support and that's at 6600/6700 Dow and 675 Sp. The Nas at the 1275 area......