This was another bloody week on wall street, specially on Friday. S&P500, Russell 2000 and Nasdaq all hit lower lows, only Dow was a little higher than the recent low. An early call for bounce was bad call and cost me lot of money. This again tells me patience is needed in time of crisis like this, you can find better price later by just waiting!
- The recent "buy on dip" is not working any more, which is the case since 2006.
- The magnitude and the speed of this sell off surprises most of us.
- There are two possibilities here:
- Another sell off to 400MA in S&P500, which brings us to 1360 or lower, a black Monday, so to speak.
- Or a bounce that brings us back to 1490-1500 area.
- I think we'll have a bounce, and may not reach 1490.
- Considering the oversold conditions and the credit news all over the places these days, it's likely the bottom is in or very near.
- A sell off on Monday and Tuesday morning should be another opportunity to add, if you think this is not the beginning of the bear market.
- We'll have a relieve rally after Fed meeting. How strong or weak of the rally, and, how long it lasts is any one's guess.
- VIX is at new high again, closed above 25!
- ISEE had three days below 100 recently. Again argues for a bottom here.
- Above are two charts of SPY, you can find your own conclusion.
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