Good morning. Happy Monday. Hope you had a nice weekend.
The Asian/Pacific markets closed down across the board. Indonesia dropped more than 5%; Hong Kong lost more than 4%; Australia, Singapore and Taiwan more than 2%. Europe is currently down across the board. Germany, France and Amsterdam are down more than 2%. Futures here in the States point towards a relatively small gap down open for the cash market.
I don’t have much to add to the comments I made over the weekend in my weekly report. The overall trend is down, but over the last two months the indexes have obviously been range bound – call it a distribution pattern within a downtrend. And on a shorter term basis, things seem to be deteriorating. The S&P has made two lower highs and a lower low within its pattern, the internals are firmly in bear mode but nowhere near being oversold, money is flowing into safer issues and many leading stocks have finally started to come down.
There isn’t much for the bulls to hang their hats on…except one thing. If Greece gets bailed out (they need another infusion of cash before the middle of the month), the market could jump (news trumps the charts). I’m not going to handicap the odds that happens, but we need to recognize its possibility. Whatever pop may follow would be good for all traders. If you’re a bull (not sure why you would be bullish at this juncture), you’d obviously welcome the higher prices, and if you’re a bear, higher prices would just allow you to short more at higher levels.
I maintain my stance and see no reason to change it. The trend is down, so we look to short breaks of support and bounces that fizzle. For now my S&P 500 target is 1000 – approx. 131 points below Friday’s close. I personally think we’ll go lower than that, but for now that’s the level my charts tell me to target. More after the open.
headlines at Yahoo Finance
today’s upgrades/downgrades
this week’s Earnings
this week’s Economic Numbers
0 thoughts on “Before the Open (Oct 3)”
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i short bounces
I mentioned on FRI that if you draw a downtrend line from 1196 on any short term time frame you’ll note that a move above SPX 1146 is needed to get a further rally going, in my opinon.
The upside potential appears limited however. In the meantime (EW aside) the last shelf of support at 1120-1140 is under attack once again which, if broken, leaves the AUG low at 1101 easily attainable. Other than the extreme bearish sentiment, there doesn’t seem to be much to spark a rally.
as a bear i dont feel extreme enough yet
when i hold overnite i mite be getting extreme
i am getting extreme the euro—its worthless
back to sleep now untill i feel a extreme coming on
Hey! Would you guys keep the noise down.
we are just geting excited about a pos aug double bottom
but they dont hold in bear markets
the russell has broken the aug lows and could turn impulsive
bonds look good even at these lofty levels, 10y probably going below 1%. but 4th quarter is generally a down one for bonds, so don’t set your stops too loose. or even sell into strength to buy in january. buy gold and silver at this dip, and lots of it. copper not so much, industrial stuff may go back to year 2000 levels if china cannot hold up in this second dip.
Jason
I am calling a bottom here. For a few weeks the market was not acting normally just as it acted six weeks before 911. I wrote formulas to pick a bottom in 2000 and i am still using them today! My bottom feeding models tell me today or tomorrow will be the bottom. The one show stopper is if we do get a gap up in the open and the gap up breaks down then all bets are off. If we get a gap down I am all in!
LONG
Yup I was right the bottom was here. We shall see if I can do it again. I wish tops were so predictable.
Paul