Sunday, October 18, 2009

It's good to be back...

Thanks for all the great comments as I left for NY. My wife and I had a great time celebrating our 16 years of marriage, and we were gone long enough to miss being home with the kids, so it must have been the right length ;-)!

I've spent some considerable time catching up on the charts, and the price charts are getting quite messy. It is during these times I like to step back and consider where we are in things.

So this is what I came up with:
- a massively overbought stockmarket (even monthly chart is overbought)
- a corrective move that is losing momentum
- a couple of different counts that show the market in the last leg before a significant (if not impulsive) correction
- an overly bullish sentiment w/o the fundamentals to back them up
- quarterly earnings that were able to beat earnings estimate on mostly lower revenues and still down YoY
- key pivots likely being put in either last week or this week that could coincide with a 34 week fibonacci turn date (+/- 1 week) as we begin week 33.

All this tells me to be cautious about the upside potential from here. The key support areas continue to be the daily 34 SMA (currently at 1050) and the rising trendline off of the March 2009 bottom. A confirmed break of the SMA should be a leading indicator of a break of the trendline.

Watch the charts and the USD. Don't get aggressive on the short side until we see a confirmed pivot break.

1 comment:

  1. It's good to have you back! Thanks for taking the time to post an update.