Tuesday, September 01, 2009

Stocks Head South

If you've been reading my posts over the past week, you would know I was very clear about which way I thought the stock market was headed. On August 24th, I wrote about how this move to new highs in the stock market was probably a false move. There were many reasons for my cautious/bearish outlook such as seasonality, lack of momentum, inter market relationships and just plain old technical analysis.



Above we see the S&P has broken its short-term trendline. The market is still open as I am writing this (12:30 pm) so it will be interesting to see where we close.



Remember the weekly Doji that I wrote about last week? Doji formations are very significant at market tops and always get my attention and respect.



Above is the S&P compared to the Shanghai index. The above chart was the real tip-off as far as I am concerned that the S&P was about to head lower. Notice the strong divergence between the 2 markets. The S&P made a new swing high but the Shanghai index made a much lower high. You can read my original post from last week entitled questioning this move up in the stock market.

2 comments:

Anonymous said...

I'm inclined to wait until the DJIA closes below the Aug 17 low before going short. What do you reckon?

Anonymous said...

hope kevin purchased GLD as per his charts.. I did a ady trade and scaled out today.
1000 would be a tough cookie to crack...

DISCLAIMER

This site may include market analysis. All ideas, opinions, and/or forecasts, expressed or implied herein, are for informational purposes only and should not be construed as a recommendation to invest, trade, and/or speculate in the markets. Trading and investing involves high levels of risk. Any investments, trades, and/or speculations made in light of the ideas, opinions, and/or forecasts, expressed or implied herein, are committed at your own risk, financial or otherwise.
 
Google
Technorati Profile Finance Blogs - Blog Top Sites