False Rally Yesterday Confirmed

November 9, 2007 | Posted by Jorge

Today’s action confirmed my thoughts on yesterday’s rally based more on the bears covering than actual buying. The last 20 minutes of trading today showed that the bears are in complete control of this market. The technicals for all three indices have broken down and look to be bearish in the near future. I’ll reiterate that, at least in my limited knowledge of technicals and experience in the market, we won’t have a rebound until at the very least DJIA 13k and S&P 1420. The technicals indicate a battleground at those levels. I hope we won’t see that play out next week but with options expiration coming up, I can see even more profit taking and short selling as a result of the horrible third quarter earnings reports we had and the credit / housing crisis. I’m currently about 80% cash and sitting on the sidelines attempting to regroup. It’s been a rough week for everyone I think.

I’ve been under the weather the past few days (Florida flu.. aka first cold front of the season!) and as a result I’m a bit behind on the index / ETF series. I’ll get back to that as soon as possible. Perhaps I’ll read my own articles and take some of my own advice to heart. If you went short the QQQQ or the SPY, you probably did alright this week.

Holiday on Monday (although not for the markets) so enjoy the long weekend!

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