Thursday, November 17, 2011

Bulls Getting Hammered

There is not much good that can be said about today's action except that the Dow did not break the 11/1 low and markets finished off the low.  So, we have some hope that tomorrow will not be more of the same.  Apparently the Wall Street Journal published an article about the bullish triangle, so we know that it is not too likely to work out.  Remember the "bearish" head and shoulders top in 2009 that was busted.  This time however, I think it is more likely that we needed a shakeout to keep the bulls honest.

The SP500 has now matched two down days with the initial two days down from the rally high in October.  This is another reason to think that the worst may be over.  We also came close to testing the 50ma today.  

All that has happened so far is the SP500 has been trapped between the rising 50ma and the falling 200ma.  The reaction is to be expected either way.  This is a sideways market that frustrates everyone.  The only thing to do is to wait for a trend to emerge at this point.

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