Market Timing-Whats Next -Dec 2nd- WAVE UPDATE

 

NO CRASH IN SIGHT ??

are you sure??

who was that masked man

oh no

its the CRASH MAN, or should we say TRASH MAN

whatever or whomever, this wave formation

could lead to a lower low

and it wont take very long to show up.

MY XL spread sheet goes back 8 years and I can pullout any time frame

to show what happened when.

THE INDEX was at 8000 on Aug15th & by August 19th the DOW was OFF 700 pts

FROM CHART WATCHERS

The 10 year treasury yield posted a reaction high in early September at 2.11%, then proceeded to mark a significant low near 1.70%. That became the trading range until the breakout in the second week of October. Upon that breakout, 2.11% became the support on the yield. But the yield began tumbling in late October and 2.11% support was lost. We have yet to rebound back above that technical level, though we had great opportunities on both Thursday and Friday to do just that. We failed miserably on Friday with a very ugly long red candle. Yields have had a strong history of leading stock market action the past several years. We can't take the yield's failure last week too lightly.

The November flight to treasuries and the continuing relative strength of defensive sectors paint a not-so-great picture of our current market environment. Throw in the volatility and daily gaps because of uncertainty in Europe and it simply spells trouble for equity investors and traders. Don't believe me? Ask the MF Global traders. Or the Goldman Sachs market making unit. Or John Paulson, hedge fund manager extraordinaire, who last week issued an apology for losing investors 44% year-to-date in his Advantage Plus Fund. This market is taking down EVERYONE.


BEST WISHES - Jay

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