Let's look at the charts.
Click on them to get a bigger picture:
Notice the following:
-- The markets opened lower. This was not because of the bail-out package but because there were several other bank problems in Europe. However, the markets moved sideways until the vote. Then the markets essentially went cliff diving.
-- Notice how the markets dove 4 points on the news that the measure failed. That should tell you a great deal about what the markets want right now.
On the three month chart, notice the following:
-- First, ignore the double printing of yesterday's bar. I have no idea why that happens.
-- The shorter SMAs are below the longer SMAs
-- All the SMAs are headed lower
-- Prices are below all the SMAs in a big way.
This is a bearish chart -- big time.
On the 7-year chart, notice we've moved through the 50% retracement level and are moving to the 61.8% level. Simply using Fib ratios we're looking at roughly the 110 area as out next level of support.
On the multi-year QQQQ chart, notice the index has broken through all important multi-year areas of support. However -- this weeks bar is only from 1-day. That bar could change by Friday, which could somehow keep this latest weekly bar above the long-term support line. However, this chart indicates that NASDAQ is about to break down as well.
On the IWMS, notice we've approached 65 several times this year but have been rebuffed. Now we're approaching that level again and we have a damn good reason to break through it. We haven't -- yet. But we could.
Bottom line: all three averages are looking to break multi-year support.
3 comments:
I don't know about this stuff in great detail, but yesterday's price drop reminds me of a 3 year old who threatens to hold their breathe until blue if they don't get the toy they want. That tells me it's time for the adults to set some strict boundaries.
I agree with US Blues. The banks / financial institutions want the gov't to buy their bad paper (get it off THEIR books). Hell, I'd love the gov't to buy my investment property for what I paid for it. I'll even take 80% of the purchase value. I want to be fair (snark).
Of course Wall Street will not like (hence lobied congress will have a hard time voting for) a plan that addresses many other problems AND requires... well oversight, no golden parachutes, make Wall Street pay for what it is given (revenue neutral non tax payer bailout), GAO review of any plan, stop 'father knows best, take it now or I'll take your jobs and remove any possibility of you borrowing a cent' coersion!
Start from scratch on a new proposal. Do not try to add a few flowers to thistle patch.
Congress, listen to the 50/100 to 1 calls asking you to not give a taxpayer bailout to WS. Congress, listen to your constituents, not the lobbiests for WS IF YOU WANT TO HAVE A JOB AFTER Nov. 4!
Thistle patch... "Add a few flowers" ??? My misrepresentaion. More accurate to say they tried pulling a some small weeds around the edge of the thistle patch and call it a garden.
(I did not want to use the cliche: "Lipstick on a Pig", not wanting to be accused of calling any VP candidate a pig, dog or whatever!)
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