Monday, August 20, 2007

Retest time ?

I will keep it simple. As i commented in my last post, we found support in the SPX 1360-90 area and bounced. Is the bounce for real ? Maybe !. But so far there's no evidence that the bottom is in. I need to see the weekly CCI move back above -100 and the NYSE MCO 5% and 10% components move above zero to assert a traedable bottom has been seen. We should know the answer to that in about a week.Right now it's retest time and i would expect at least a test of 1410-20 area sometime this week. The "Fed bottom" (8/16) should not be violated in any case here, which would be very bearish. Even if we violate the 8/16 bottom by a tick, the next target would be SPX 1320-30. So essentially we remain in a volatile environment, where one could be a genius one day and the monkey the next day. Will continue to play both sides, with a bearish slant this week.