IDEAS BOUNCING AROUND MY HEAD ON A SATURDAY
Analysis of the price action and some of the trends taking place within the markets leads me to believe we have another 6-10 percent on the downside left for the S&P, Dow and Nasdaq Composite. I don't see a sustainable bounce taking place before the 6-10 percent threshold is met. With the ferocity that this market seems to possess, it could happen in the coming week.
By sustainable bounce, I mean a move that will be multi-week in nature and test some significant areas of overhead resistance. There is an army of technically significant price vacuums sucking the market down towards them. The bulls don't seem to be in any shape to get in front of the strong suction to the downside. All of these price vacuums are between 6-10 percent below the closing price on Friday depending on which average you look at.
I'll go over the specifics, in terms of price levels, reasoning etc. in the weekly review tomorrow.
I will also touch on the topic of groups of stocks that haven't even started showing signs of panic yet. This tells me that the bulls continue to hold firm in their favorite stocks. A bottom for this type of move only occurs when all groups of investors are flushed. Thus far, it seems a large portion remain hanging on for their dear lives. They will need to be dealt with before the bulls can ride again. Again, more details on this tomorrow, along with examples to make the concept crystal clear.
Lastly, gold and silver are setting up for a fantastic short opportunity here soon. One more move up, on the back of some type of panic move to the upside, will be the perfect setup. I would prefer to short silver over gold, as silver has been the weaker of the two over the past few months. ZSL looks like a good option to gain exposure. I'll provide further review tomorrow.
That's what is on my mind this Saturday. Enjoy the weekend.
