Market opened a gigantic gap down on Monday...

I don't think there aren't any shorts left out there, now the market drops like a rock for 2-3 days below 200 dma is my guess. The leadership absolutely sucked today, RUT and NDX underperformed SPX, the growth sectors pretty much stopped at their gaps. I don't think there should be a bottom before mid next week. What's truly disgusting SPX has been closing the weeks around 1363 week after week while everything else crumbled... I doubt any further upside comes out of this.

Edited by arbman, 26 July 2012 - 03:44 PM.

I'm still here...still short...wondering if we will ever break out of this up and down chop. My biggest gains tend to come from being patient and ignoring the day to day random moves. downside isn't finished in my opinion. trend is down. earnings down. technical momentum down. economies around the world down. commodities down. russell and transports down. banks and sox down. corn and soy (a bad thing) up. the S&P is basically the only thing left that hasn't cracked...it should soon. i think today was a massive fakeout.

they are seemingly talking the major markets into a trading range trying to hold it up w/o directly injecting any more QE/LTRO

spx held up by the swings bigger picture looks broken, but as long as we make higher swing highs and lows, the swings dominate ~70TD wave still has room to go, but as weak as it is, we should break down soon First we have some ~5 days to make a higher swing-high. If that fails, we are done. If we get it... we could stretch this past the olympics I guess at best

Momentum was very strong today and the Fed next week. My guess is we won't fall aprt before the Fed, but maybe will start losing momentum. Computers are driving the futures in sync with 1 min Euro chart. However Only SPX was able to break the morning highs, none of the other major indexes did. Internals suck, economy sucks, everything seems to be pointing down, and yet they keep generating these giant gap up squeezes time after time with nothing but "words" and hope. And amazingly it works every time. I'm guessing both longs and shorts are sick of this market. One thing I know is that no particular market conditions last forever. and the character of this market will change one way or another. In time. My mechanical system has closed the short and went long. And since I personally have no interest in being long, I'll just wait.

Edited by ogm, 26 July 2012 - 05:35 PM.

POMOs and currecy swaps are around $20B per week, Fed is already injecting a ton of money...

I don't think there aren't any shorts left out there, now the market drops like a rock for 2-3 days below 200 dma is my guess. The leadership absolutely sucked today, RUT and NDX underperformed SPX, the growth sectors pretty much stopped at their gaps. I don't think there should be a bottom before mid next week. What's truly disgusting SPX has been closing the weeks around 1363 week after week while everything else crumbled... I doubt any further upside comes out of this.

I basically agree with all of that Arb, except....market trends all saying higher first... the drop comes from 10-20 points higher imho. Best, D

http://stockcharts.com/c-sc/sc?s=$NYAD&p=D&yr=0&mn=4&dy=0&i=p95798002474&a=270840190&r=629.png

"I basically agree with all of that Arb, except....market trends all saying higher first... the drop comes from 10-20 points higher imho. Best, D" Ditto, I'm with D here. The internals imply higher tomorrow-we aren't quite through here.

Did you guys notice that SPX barely advanced a few points beyond the overnight futures action, I think it was finished when it opened and the closing rally was just a short squeeze. There is no point in pushing the index higher overnight, there isn't even shorts to cover anymore, my impression is even if the prices open 3-5 points higher, they cannot stay there. I expect a negative close today and below 1330 by the Fed meeting... BTW, the POMOs pushed over the past 2-3 weeks are already the equivalent of $80-90B per month, Fed is already doing the QE3. They just didn't say this will happen the same for the next 5 more months. The trouble is the market response is fairly week for the intervention. I was expecting to trade over 1400 by now or over May's payroll gap. Instead the market is barely trying to take back 1360 support and the growth is lagging. If this continues, we will see a crash in September or early October... Very Best...

At this point I will not be surprized if it rallies or fails. This market has been an extraordinary whipsaw with gaps and reversals galore. Trends say higher, but there are plenty of signs either way. But most of the time we are just following Euro on 1 min chart.