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Yesterday I wrote a post describing my opinion on the direction of the markets. I focused on the S&P 500 and, after reviewing the chart situation, came to the conclusion that the most likely direction was down.
Today we opened with gap to the downside and the index never recovered. The gap is clearly visible in the chart below which shows what happened to the S&P 500 SPDRS (SPY) ETF.
Shortly after I saw the gap, I decided it was time to nibble on a few shares of the ProShares UltraShort S&P500 (SDS) ETF. Purchased at $55.13, SDS closed today at $56.08 for a quick little 1.7% gain.
The chart now looks worse than it did Friday. Today's sell-off came on decent volume but not extraordinary volume. This implies we have not yet seen the kind of capitulation that marks a bottom. Note also how the MACD on the chart above is on the verge of confirming the bearish direction. It looks like SPY might have a bit further to fall.
Disclosure: author is long SDS
Monday, December 17, 2007
S&P 500 gaps down - confirms bearish outlook
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2 comments:
Indian stock market
Hi Everyone.
Your blog is nice and informative. We think your visitors will like this posting.
We all know that Indian stock market has become volatile now a days. One day its going up and another day its coming down. So we all should like to know
what is the reason for it. As in the last post we have mentioned that FII are the main reason, but now to there are few more factors adding to worries, they are:-
1. FII profit booking.
2. Political issue - Indo-US nuclear issue.
3. 25 Basis cut which was expected by US people of atleast 50 basis.
4. Low volumes due to holidays in coming week.
We suggest you to take bit long positions right now as market is volatile so don’t prefer intraday trading for few days.
All scripts are currently trading at low price hold them for 10-15 days so gain maximum.
Regards
SHARETIPSINFO Team
+91-9899056796
+91-9891655316
+91-9891890425
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