WEDNESDAY WAS THE BEGINNING OF THE PROCESS THAT WILL END THE CURRENT MARKET DECLINE
140 characters doesn't serve justice to certain market situations and scenarios. We are in the middle of one of those scenarios now. In order to demonstrate my thinking appropriately, I need a bit more amplification than 140 characters allows.
I made a comment on Twitter during trading hours regarding the spike in put/call ratio as the S&P 500 had a rendezvous with the trajectory from the 2009 lows. The very same trajectory that carved out the low in October of 2011 that I bought hand over fist. The identical trajectory that gave us our low in June that was brought to you in living color days before it happened by yours truly. That same trajectory that is now acting as a floor to keep the market from diving off a technical cliff. And the touch of the trajectory is occurring with a spike in pessimism. The perfect recipe.
I did make a declaration on Twitter that today's low may be it for the month of November. We are now in the zone where a bottom will more than likely be taking shape over the next few weeks. It could indeed be true that the low for the remainder of 2012 occurred today. At the very least, we have started the process of ending the decline. I'll say it again, today was the first day of the beginning of the process that will end the current decline.
Let's take a look at a couple of charts, with notes included, as always. The first shows you the importance of the trajectory we came a hair away from touching today. The second is a demonstration of the put/call ratio with the S&P 500 charted below it:
click chart to enlarge
S&P 500
PUT/CALL RATIO & SP500
