Wednesday, October 29, 2008

Stock Market Continues To Make Lower Highs



As you know I am bearish on the stock market and if you look at the above chart you will see why I am looking for shorting opportunities. You'll notice in the above chart of the S&P500 that the market continues to make lower highs which indicates to me that the bears are in control. If the bears are in control of this market then we should only be looking to play from the short side until proven otherwise.

What I find interesting about the above chart is that the market rallies for one or two days and then heads back down again. Having said that, I think we'll start to see stocks move lower either tomorrow or the day after. Sellers seem to come into this market after 2 day rallies and we've seen this pattern take place repeatedly since September. I'm bearish and will continue to play from the short side.

1 comment:

Anonymous said...

Its important to note the difference between forced selling and typical selling. When the forced selling ends you get a huge move up.

We are seeing sign of the forced selling ending and buying balancing that. This is shown by the bullish declining wedges. We broke out yesterday and today short-term traders took profits at the end of the day. Note the last few days we'vd had this crazy futures sell-offs in the last 20 minutes. This is someone short trying to keep the market from break up - as your chart show. So its players who are thinking like yourself - but they cannot do it during most of the day but use massive firepower at the end of the day - this is desperate play - here at the bottom of FORCED selling.

I predict that we will blowout tomorrow and above your lines. I would not suggest shorting until much higher. - 10% higher use your favorite trendline or Fib. line.

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