Here are the levels where the current rallies should fizzle out or for the major indices given the leg down from the highs over the last couple weeks.
- S&P 500 1497-1511
- Dow 13575-13679
- Nasdaq 2620-2645
- Russell 2K 811-822
If the rally fizzles out sooner it should be an indication of a stronger bear trend than we think. Remember you learn a lot more about your stock on reactions than you do when it rallies. Like in sports you learn more about your players and teammates when you're losing than when you're winning. I know it sounds simple but it works.
A quick note regarding Mondays action. Yes I know the Dow was up 286 and the Naz was up 36. The issue I have is with the internals. They were horrible. NYSE had 1787 advancers and 1553 decliners with 29 new highs and 232 now lows. The Naz showed 1450 advancers with 1614 decliners and get this, 24 new highs and 250 new lows(WOW). This is a narrowing of the market to say the least. This smacks of a short covering rally rather than the start of a new advance. This rally may run a ways but pay attention to the box I mentioned above. You can ignore this internal deterioration but to do so is foolhardy. Please ignore the paid shills on Pompom TV. You must look out for yourself. The credit problem is so not contained and is spreading higher up the food chain (corporate land is next my friends) and I fear that what I expect on the bearish side may actually be tame compared to what may actually be developing. Hope for the best and plan for the worst. Good trading to you all.