Yeah today's drop wiped out a huge chunk of last week's gains. I was expecting a few red days this week before resuming the rally, but today's drop was so fast and furious that I have no idea what to expect now.
This is a rough market, and is not for the feeble of heart. First we get a ridiculous 5-day rally that surprised even the bullish of bulls, and then this sudden selloff to undo all the exuberance of last week. Even with today's drop I'm still seeing confirmation of positive momentum divergence on the daily charts (the MACD is so far making a third consecutive higher low), and we closed at an important retracement level. This probably correlates with Air Langhi's comment about volume. We'll see where it heads tomorrow, but right now there's at least a 50/50 chance of a bounce from here. If we don't, then we're going to be re-testing the lows.
This market just seems like a time-compressed market. People expected a crazy 20% rally over a few weeks, and then drifting back down to test the lows - the up rally happened in 5 days instead of weeks. The downdraft might be over in another day or two at the rate its going. It's almost as though the market is just like any other bear market, except one day in this market = one week in normal markets.
Man this is getting scary...Tommorow will be a better day. I have a feeling the DOW will go up aroun 4 to 5 hundred points for the day. Buy! Buy! Buy!
Oil refusing to rebound... SPX fighting resistance at 843. If it breaks higher then we might actually have a real rally.
TK at slope thinks that USD is still topping out and that when it starts to finally collapse, oil will rally big. Personally I'm still not seeing any convincing rationale for oil to fall lower than it has, and that's why I'm still holding on to my commodities position (UYM) despite taking a small beating on it. As for the general market, I knew that falloff at the end yesterday was just an overreaction and there would be a snap back this morning. The issue was the general slow-bleed downtrend that started around 10am yesterday. Right now it looks like the market is trying to break through that trendline, and the positive breadth is looking good at the moment. I still need some more confirmation though, and $TNX is making me nervous as much as I try to convince myself that it's only due to the new TARP wrinkles.
Ha, I just saw his update. I actually entered into a modest position of DIG earlier (about 4 cents off today's low). I think I got a nice TK/SOH bounce!
OK, the reversal is complete now. I would be looking to pick up some SDS at SPX 887, and *definitely* at 931. I'm starting to like these retracement levels.
Oil isn't bouncing anytime soon in my opinion. I may be way off here but I believe I saw a report on CNBC that said China is selling off some of the oil it has stockpiled. Anyone else hear something like that?
Oil won't rebound until OPEC meet in 10-12 days IMO. When the demand goes down for Oil like they have been, OPEC need to slow down production to stabilize oil prices.
Some have been suggesting that Crude might move upward some when the Dollar peaks. <hr> pgabriel Is this what you are thinking of? China May Halt Diesel Imports This Month on High Stockpiles <i> Nov. 5 (Bloomberg) -- China, the world's second-largest energy user, may halt diesel imports for a second month in November because of rising stockpiles, traders said. China International United Petroleum & Chemical Corp. and China National United Oil Corp., the nation's biggest oil traders, won't buy any diesel cargoes this month, said two officials with knowledge of the companies' purchase plans. They declined to be named because of internal rules. Fuel inventories have risen as oil-product consumption fell after the world's fourth-largest economy grew at the slowest pace since 2003 in the third quarter. China increased imports of diesel, used to fuel trucks and power generators, to a record 970,000 metric tons in July to ensure supplies during the August Olympics Games. ``Domestic consumption has waned even as we approach the peak winter demand season,'' Yao Daming, the director of the oil department at Guangdong Oil & Gas Association, said by telephone in Guangdong province, the nation's manufacturing hub. ``Stockpiles at privately owned teapot refineries are currently very high.'' Unipec, as China International is known, may not need to import diesel cargoes in the short term, said one of the traders, declining to be more specific. The nation's stockpiles of petrochemicals have risen to records because of the slowing economy, PetroChina Co.'s Chairman Jiang Jiemin said last month. Chinaoil, as China National is known, is the trading unit of PetroChina, the nation's largest oil producer. China Petroleum & Chemical Corp., Asia's biggest oil refiner, will cut crude-oil processing volume at refineries with ``relatively low profitability'' because of falling fuel demand, parent China Petrochemical Corp. said earlier this week. Unipec is a unit China Petroleum, known as Sinopec. </i>
Ahhh ... finally some things are making technical sense out of this horrible tape we see day to day. I just noticed this on the hourly S&P chart... That's a nice right shoulder on a massive inverted H&S pattern forming, and it mirrors the left shoulder pretty well (the sharp selloff we had yesterday was very similar to the previous sharp rally off the 820 low). We will need to break resistance at about 915 to complete the pattern. If that happens, I will definitely be loading up on my 401k.
I should also add that getting to 915 (and breaking it) would mean effectively breaking the downtrend that began in September. In other words, if this H&S pattern completes, we *will* get the big rally we're expecting, with a target of around 1100 using the basic H&S measurement. Here's a bigger chart with annotations:
Some attractive-looking longs at the moment in heavy construction: HIL (possibly 50, 60, 70% gain here if that bull flag pans out) JEC, AGX, FLR, PCR, PWR
