I still favor the market continuing down to complete the first leg of the "bear" that nobody has really recognized yet....once that ends (1100's is my prediction) we can see a pretty sustainable and powerful bounce back up very reminiscent to what we saw in march of '08 where SnP bounced from 1256 to 1440....today it would look something like 1150 to 1300-50....I will look to cover my shorts at completion of first leg down....
With that being said I'm on the look-out for this bounceback counter-trend rally which I just touched on starting on June 1st when S&P got shelled to hit a low of 1268....this would mean we are smack in the middle of this move higher....I stated yesterday I will look to hedge or simply exit all shorts on a move above 1330-35 this still holds true....this is not my favored scenario but have to be ready for anything and make sure NEVER to get caugh flat-footed...especially in this market landscape with central bank intervention seemingl every other day....
Chart above has my "cover shorts" zone indicated....pretty simple right now as I see it....1) we remain in this downtrending channel labeled in thick blue dotted lines and we go down to test bottom of it and remain in the first leg of bear move down....or 2) we break out of this channel and we see the counter-trend rally continue which began from 1268 SnP....
PS-All world charts still look terrible....single sector domestic charts ditto....our market indices ditto...and individual leading company charts look awful as well....not a good sign...Question really is do we go down further now? Or do we go down further from higher levels? I'm betting on the former but prepared for latter...
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