See the Market Forest instead of the Trees

I just realized after re reading my previous post that I am probably incorrect in saying the market has a chance of rallying higher rest of this week.  I am changing my mind on that outlook and now believe while there may be a minor bounce higher tomorrow, it will likely be very weak and maybe sold off intraday at the close.

I expect a strong resumption of the down trend after tomorrow.

I have discovered a piece of market action from the market top in 2007 with a very similar indicator setup to what we have now.

It is basically telling me that the reversal we had on 5/17/2010 was likely only a one day head fake and not to be believed a having extended staying power.

Here is the chart:

sp50020100517

So my new conclusion is that we will swing down again soon (starting this Wednesday?) and head for the target level of 1044.50 on the Sp500 as a bottoming point.

Posted in Index Trading, Market Timing, SP500
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