Just a short post today, I am traveling the next few days but will still be giving market commentary.
We did sell off a bit today and came down to about what I thought would be the maximum we could or should go if the market was going to hold up. The jury is still out and tomorrow will really be very important. If the market holds up tomorrow, there is a good chance that we could rally on Wednesday. The sentiment I know has turned bearish by a good margin with the unemployment numbers being a disappointment. I looked at all the individual Dow charts and it is a tough one to call. Tomorrow will tell the story as far as I can see it. The possibility does exist that we just break down hard right from here. Everything is right on the edge, literally. If the market breaks down as I have it marked on the screen shot below, you could see the numbers as posted very quickly. That would be about -1500 points on the Dow and -150 points on the S&P.
You have to look at both sides and that is what I did in the chart below. A upturn may really get started before S&P 1106 but that will confirm the move for sure. So, the line in the sand has been drawn and we only have to wait and see tomorrows session to give us a good clue as what Wednesday may bring.
It looks bad out there, I will agree, but this could be just the perfect storm to catch the unsuspecting? This is going to be conditional call as it often ends up being. If this, then that. If we break hard and close under 1137 on the S&P, I don’t see much hope, as the flood gates will likely be opened for a huge round of selling.
If we can hold through tomorrows session, I believe, the sentiment will be overwhelmingly bearish, which could set the stage for a rally in the opposite direction. So, hold your breath and lets see how it turns out. As identified on the chart, the current trend is clearly short. Going long before the evidence is in, would not be advisable and risky business. Give it a little time and it will become clear. That’s it for now, Good Trading. 
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