<p>I updated the indicators here:&nbsp;
http://bloomblog.spaces.live.com/default.aspx.&nbsp; It’s worth a read as indicators
provide objectivity, a good alternative to panic.</p><p >A few superlatives:&nbsp; VIX is
up 86% this week, 146% in the last two.&nbsp; This represents unprecedented sharp
movement from extreme complacency to panic.&nbsp; It’s time to buy when blood is
running in the streets (of Athens, literally).</p>
<p >EWP, the Spanish ETF, lost 15.7% this week, 24.02% in the last 4.&nbsp; Many
other European countries and even Russia were similarly crushed this week.</p><p >Market breadth has declined more than all post-crash pullbacks, settling
at 15.&nbsp; March 09 and Oct 08 went lower.&nbsp; The market is extremely oversold and
likely to bounce.</p>
<p >SPX fell 6.39% this week, compared to last week's 2.5% decline.</p>
<p >SPY volume Thursday and Friday of this week exceeded all 2009 and 2010
levels.&nbsp; The crash of 2008 had comparable levels.&nbsp; Bounces have always occurred
after SPY volumes this high, but in 2008 were not very long or strong, while in
2009 and 2010, they tend to catalyze long rallies.</p>
<p >I remain bullish and the market is very tradable from the long side at
these levels.&nbsp; However most ETFs have dropped below their 200 day moving
averages.&nbsp; That makes then primed to trade from the short side.&nbsp; Shorting
European and commodity ETFs could be a good hedge for long exposure on USA.&nbsp; A
market bounce is needed though, a significant one, to initiate short exposures,
and then only on the ETFs too weak to move back above their 200 day moving
averages.&nbsp; Shorting immediately into a likely bounce is not recommended.</p> Published By Bloominonion Saturday, May 08, 2010

<p>I updated the indicators here:&nbsp;
http://bloomblog.spaces.live.com/default.aspx.&nbsp; It’s worth a read as indicators
provide objectivity, a good alternative to panic.</p><p >A few superlatives:&nbsp; VIX is
up 86% this week, 146% in the last two.&nbsp; This represents unprecedented sharp
movement from extreme complacency to panic.&nbsp; It’s time to buy when blood is
running in the streets (of Athens, literally).</p>
<p >EWP, the Spanish ETF, lost 15.7% this week, 24.02% in the last 4.&nbsp; Many
other European countries and even Russia were similarly crushed this week.</p><p >Market breadth has declined more than all post-crash pullbacks, settling
at 15.&nbsp; March 09 and Oct 08 went lower.&nbsp; The market is extremely oversold and
likely to bounce.</p>
<p >SPX fell 6.39% this week, compared to last week's 2.5% decline.</p>
<p >SPY volume Thursday and Friday of this week exceeded all 2009 and 2010
levels.&nbsp; The crash of 2008 had comparable levels.&nbsp; Bounces have always occurred
after SPY volumes this high, but in 2008 were not very long or strong, while in
2009 and 2010, they tend to catalyze long rallies.</p>
<p >I remain bullish and the market is very tradable from the long side at
these levels.&nbsp; However most ETFs have dropped below their 200 day moving
averages.&nbsp; That makes then primed to trade from the short side.&nbsp; Shorting
European and commodity ETFs could be a good hedge for long exposure on USA.&nbsp; A
market bounce is needed though, a significant one, to initiate short exposures,
and then only on the ETFs too weak to move back above their 200 day moving
averages.&nbsp; Shorting immediately into a likely bounce is not recommended.</p> Published By Bloominonion Saturday, May 08, 2010 Read More

U.S. equity markets seemed ready to recover early in session on Wednesday, but continued to sell off toward the end of the session. There were only a smattering of bullish reversals, and none passed the nets. It appears that the $INDU will likely test 10700 and that the $SPX will likely test 1150 before this sell off ends. If those levels are broken, we are likely going lower, and I will comment on future targets in blog. As one can see, all momentum indicators are pointing south. Any true confirmation of a broader turn down in momentum will hit by month’s end as the data for the month is incomplete. Regardless of that, seasonality, with summer coming, might indicate more sideways movement (like in 2004 and 2005). With all the cross currents associated with the EU debt contagion and potential interconnection between manufacturing (Asia) and consumption (EU and US), the road will become a lot more complex going forward. That is why one should trade with well formulated strategies and know when to take profits or exit positions. This is not the typical buy and hold environment in which your dad or granddad existed. Profits will be hard won. Read More

U.S. equity markets seemed ready to recover early in session on Wednesday, but continued to sell off toward the end of the session. There were only a smattering of bullish reversals, and none passed the nets. It appears that the $INDU will likely test 10700 and that the $SPX will likely test 1150 before this sell off ends. If those levels are broken, we are likely going lower, and I will comment on future targets in blog. As one can see, all momentum indicators are pointing south. Any true confirmation of a broader turn down in momentum will hit by month’s end as the data for the month is incomplete. Regardless of that, seasonality, with summer coming, might indicate more sideways movement (like in 2004 and 2005). With all the cross currents associated with the EU debt contagion and potential interconnection between manufacturing (Asia) and consumption (EU and US), the road will become a lot more complex going forward. That is why one should trade with well formulated strategies and know when to take profits or exit positions. This is not the typical buy and hold environment in which your dad or granddad existed. Profits will be hard won.

By: Macro-Trader On Thursday, I highlighted a head-n-shoulders pattern in the SPX… Read More