Lots of interesting things happened today.
1) The market clearly regained 844, which was the 50% fib retrace level of the 747 to 942 rally.
2) It was OPEX, so could be lots of games going on, that are not to be trusted
3) The financial sector reached lots of multi-year and in some cases multi-decade lows. BAC hit a 17 year low, WFC sank to a 8 year low, Citi sank near the Nov. 20th low, USB sank to a 6 year low.. etc.
4) leadership was hard to find... i'm not sure where the strength came from. Small caps weren't doing well, financials sucked huge, basic materials were blah, REIT's were blah, Tech was blah, etc... i don't know what made up for financials sucking so bad that the S&P closed in positive territory. Reason being that financial stocks make up a large portion of the S&P 500.
Just a scan for leadership makes me think that this was a fake out OPEX rally, but technically the market did close above some resistance levels,... i just don't know how... but it did.
So... next week.. 1 of 2 things happens...
1) whatever was floating the market fails and we go MUCH lower..
2) financials find a bottom and rally hard, along with many of the other sectors I mentioned above.
Watch financials!... specifically BAC, C, and WFC ... if these find a bottom and start to rally... there could be a LONG way to go in a rally. The financials are making new mutli-year lows... BELOW where they were on November 17th when the S&P was at 747. But we closed today over 850. A financial rally here could easily propel us far over S&P 1000 with the co-operation of whatever is holding us at 850 with the financials making new lows.
It would take time though... DO NOT expect that a rally over 1000 happens quickly. Any rally that happens for the next several months.. WILL take several months, volitility will drop and the market will seem extremely boring compared to what has been the recent norm.
That said.... if the financials do not rally... that is something that could be a horrible outcome here. IF things fall apart here, OPEX turns out to be a sham move on whatever has kept us at 850 with financials hitting new lows. 747 (Nov. 17th S&P low) will likely get taken out to the downside.
Next target is somewhere around 640 on the S&P. .... yeah.
WATCH FINANCIALS.. WATCH C, BAC, USB, and WFC next week.
If these stocks recover and start to rally... target over the next 3-6 months is over 1100 S&P.
If these stocks continue to sink and the market starts to follow them down...
well... lets say that it might be nearing time that you buy some guns, ammo, lots of bottled water and at least 6 months worth of canned food.
Good luck trading.... i think.
if you are an American. You pray that we rally next week.
No comments:
Post a Comment