Well, here's the selloff that I wanted to see happen and so far we are getting quite a spike in the VIX and the put/call ratio which I was looking for. This gap down and tank is the tough medicine the market needs to work it's way towards a sustainable bottom. AAII sentiment came in this morning at about a 1.5 ratio of bears to bulls. It's not at the 2:1 ratio that marked solid bottoms in July and November but it's getting there and if by Wednesday the market is near or below current levels we will indeed see the 2:1 ratio.
I'm already seeing the t/a monkies talk about how if 1070 is broken the downtrend we have seen will be firmly in place. That's the sort of fear of the downside we need to see. A break of 1070 in addition to a break of 10K in the Dow would probably set up for another massive bear trap similiar to the one seen in early July. I wonder if we will see such a break. I remain patient here.
In the spirit of the today's action check out this tune. If the song sounds familiar it's because it's a spoof of one of Bruce Springsteen's songs
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