Undoubtedly the bull run has come to halt rather I should say a pause for the time being. Here I am sharing 7 points that I think are important when developing your trading plan in the coming days.
(Originally this post was for OP Blog Members. Basic Membership is free till Dec 2009. Pls click here to sign-up if you are not a member).
Let’s start with#1
- Yesterday was the 2nd 90% down day in less than past 10days and it is the most weakness exhibited by the market since the rally from the Mar. low began.
- According to Lowry’s- Buying Power Index is now 13 points higher vs. its March 6 bear market low of 96. Selling power Index is just 20points off its March 9 peak at 899.
- Except Nasdaq, 3 other major indices Dow, S&P500 and Russell 2000 all closed below 50days moving average. The next potential support for the major Indexes remains at their May lows. These levels are at about 8200, 875 and 1660 for the DJI, S&P 500 and NASDAQ Comp. respectively. A violation of these levels might provide yet another piece of evidence suggesting lower prices are likely in the weeks ahead.
- 90% of the dow components (27 of the 30) closed lower yesterday.
- Majority of the S&P industry sectors ended lower yesterday, with the largest losses in financials, basic materials and energy.
- While Dow Industrial rallied penetrated through early may high, in early Jun, Dow Transport didn’t better the early May high producing a non-confirmation. Veteran Dow theorist Richard announced it as one of the strong non-confirmation signs and that we are still in the primary bear market.
- Here are the 7 ways to survive this market that still hold true and you want to read further.
OP’s Bottomline– I am bearish.
Trade carefully, Trade profitably,