Wednesday, October 28, 2009

Black Eye

Back from a quick whirlwind trip out of state. Market taking it on the chin getting a black eye the past few days. Is this the real McCoy? Time will tell but this is the highest odds since the late September top. Odds are probably higher as several indexes have broken their March trendlines. After being burned multiple times on multiple headfakes, most of the bears are wary of calling a top. That is a good thing if your bearish. Banks have led this market down (also a good thing if your bearish) but the XLF is coming up against heavy resistance 13.50 and 14. There is a series of higher lows that go back to early August. Financials bulls need to hold 14 to keep that trend going. Would not be surprised at this point to see some sort of market bounce. How the bounce feels and plays out will give me much more clarity on if we have set what will probably be a multi year top. All in all, we are only down about 5.5% from the top just a few weeks ago. Bears still have alot of work to do.

Other interesting thing is that junk debt finally broke today. Looks like it could be a double top.

Tomorrow is 3Q GDP report and jobless claims. That should be reason enough to give the markets a bounce though not sure if it will last the entire day. The big day will be Friday. Personal income, personal spending, Michigan consumer confidence revisions, and the Chicago PMI. Remember how bad last months Chicago PMI number was. This month may be just as bad.

Friday is also interesting because it ends the end of the fiscal year for some very big mutual funds.

No comments: