It was just another confirmation that the powers that be do not want equity prices to go down. So when DOW goes down 200 points what do they do? They spread rumours of coming QE3 through their boot-lickers. Would anyone still consider anything coming out of WSJ remotely creditable? The following chart from Ciovacco Capital says it all.
Anyone who still believes in free market, should get an appointment with doctor!
The bounce today was totally expected. It is the size of the bounce that mattered. Depending on whom you talk to, the resistance was between 1350 and 1360 with the strong resistance at 1355.
SPX made little attempt to break 1355 and settle peacefully at 1353. With the news coming out for ECB rate decision and Greece PSI deal or no deal tomorrow and the NFP day after, it can be quite volatile in short term. But so far the feeling is, we have seen the top at 1378. If this is the beginning of the bear market, bears will have ample opportunity for the kill. So it is better to wait and avoid any whipsaw.
Yesterday I talked about the very low NYMO or McClellan Oscillator. Today it recovered a little but is still well in the over-sold territory.
It is difficult to get a deep sell off from this level, although not impossible.
I think we will see serious weakness in the 2nd half of March, after triple witching. There are three levels of weakness/ correction we have to look for. Streettalklive .com has a very nice chart explaining these levels:
The analog matches with what I have been saying for the last few days that we will get a re-test of the high again and only when it fails we can look for a deeper correction. I would suggest caution at this point of time and personally I am on the sideline and waiting for a better trend to emerge. Let the trade come to you.
I have not been able to update the trend table today and my apologies for that.
In the reading department we have a couple of interesting reads:
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