Sorry!! The article you are trying to read is not available now.
Thank you very much;
you're only a step away from
downloading your reports.

SPX and RUT: Still a Dangerous Market


Bears have continued claiming key support levels.

MINYANVILLE ORIGINAL Last update, I warned that the odds strongly favored lower prices, and the market has obliged. Most markets are now below major support levels and the decline has given little sign of abating. As I've warned for several updates, this is not the type of market to front-run bullishly: This market continues to meet the definition of trying to catch a falling knife. At this point, I'm waiting for price to actually find some type of bottom before considering holding any intermediate long positions.

The chart below shows that most major markets have now broken their primary uptrends, as well as broken secondary support zones:

Click to enlarge

The Russell 2000 (INDEXRUSSELL:RUT) chart emphasizes why the bullish wave counts have now become lower probability. With the key level breaks that have occurred in RUT, it is all but impossible to count the summer rally as an impulse wave -- which suggests that rally will be fully retraced before the market finds a meaningful bottom.

Click to enlarge

Accordingly, for the S&P 500 (INDEXSP:.INX), I'm going to focus on the bearish wave count until the market can find support and give some signs of a turn. All indications are that the market is still within a nested third wave decline -- and third waves are not to be trifled with, except by the nimblest traders. In third wave declines, indicators often reach oversold and stay there, with only minor bounces along the way.
< Previous
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Featured Videos