Here’s What I See After The Bounce…
A few facts to think about.
In the past two days there were 590 stocks that broke below the 50-day moving
average and 250 stocks that broke the 200-day average. Frankly, that should be
enough for this report. The market is speaking loud and clear. The carnage has
not been limited to just a few groups. Rather, it has been broad based.
TRANSPORTS have bungeed. This includes
AIRLINES,
RAILROADS, TRUCKERS.
RETAIL is now sitting near a yearly low.
Take a gander at the RTH.
BROKERAGE stocks continue to get yonked.
The latest is SCH.
So…here is the
thought. The Dow and S&P are now at very important support. I have outlined the
8250-8300 and the 870 levels that have to be watched. The scenario in my mind is
a bounce about right here. After all, just on a price basis, the market is way
oversold. This time, I am skeptical whether the Dow can get above 8550 and S&P
900…areas of resistance. If in fact they can’t, I then expect the market to
roll back over and then finally penetrate support. Then, all h— can
potentially break loose. As I said in my last report, it does not mean we drop
to the October lows…but with no support, it won’t take much. Do I hear
waterfall?
Oh
yeah…breakouts. You play the breakouts. Just bring shark repellant, valium and
a bottle of Jack to numb the pain.
I am appearing on FOX NEWS CHANNEL Thursday
in the 4:00 – 5:00 p.m. EST hour. Don’t miss it. I will also be on Saturday at
10:30 a.m. EST. Both shows are hosted by Neil Cavuto.
Lastly…and yes, I am putting it out there…take the
Bucs and the points. Defense wins super bowls…but of course, it
will come down to turnovers.
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