The market celebrated a historic Obama presidential win by selling off! I think the market has finally tipped its hand. The bond market and the currency market never confirmed this rally of the last few days. The $/Yen has cracked below 98. The VIX bounced off support yesterday.
I think next week is shaping up to be brutal. Any rally, if it occurs, in the next two days will be the last opportunity to go short at a better level. I am looking for at least a test of 2002 lows.
I think next week is shaping up to be brutal. Any rally, if it occurs, in the next two days will be the last opportunity to go short at a better level. I am looking for at least a test of 2002 lows.
2 comments:
Hi Vinay,
I enjoy reading your concise and to the point posts. Why do you feel that the next week is going to be brutal ? What makes you so sure that the market will revisit the 2002 lows next week ?
I know that it is going to visit and probably break those lows at some point, but I am not sure if it will happen next week.
Thanks.
~ Bob
bob, next week is the pre options expiration week and it has a tendency to favor the larger trend. The targets are based on the break of the patterns on the index charts. There are a few other indicators too that suggest weakness ahead but no two people would agree on the outcome of a given indicator. In the end it all boils down to one's gut feeling. We went near the lows more than once but this new found bullishness is what may do the trick this time. No one can claim to be sure in the market but the odds does favor the downside.
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