The sp500 is not forceful enough to the downside. I think it could be simply corrective unless tomorrow by some miracle we see a big break down. Tomorrow seems to be the key ‘decider’ type of day. The decline is just too orderly for me to start hitting the panic buttons.
I think for key more important tops one usually sees a heavy and sharp and somewhat deep decline in heavy volume to kick start the decline. That has not been the case this time around. Those heavy and sharp declines are necessary to do enough technical damage so that the next market’s attempt to rally will fail. Instead, this decline has been more like very slowly cooked ground beef instead of blackened and burned steak.
I suppose I have to revert back to my earlier thought that very high volatility periods in the market are generally rare events and do not want to seem to rear their ugly head just yet.
So we will have to see if tomorrow 5/27/2011 brings any downside surprises, but it is not looking likely. Today we missed a confirmed daily MACD histogram buy signal by about 15 cents on the sp500.