Sunday, July 12, 2009

S&P500 - Now What? Q-Man Is Bearish

Here's a screen shot from the latest Tickerville Tape Talk. S&P 500 Index sits at the very precarious juncture: "the head and shoulders" pattern that everyone was watching now seems to have completed, and that neckline is actually a line that connects previous resistances (January, February, and April, in light blue circles that I added) and the recent supports during the H&S formation.

Q-man (Quint Tatro) at Tickerville is not excluding the possibility of a bounce from here, but he thinks the character of the market has changed and the short-squeeze fest we had in May is unlikely to happen again. So, if there's a bounce, it may be a light-volume bounce before going much lower. He continues to be constructive on commodities though.

Almost all sectors seem to sit at a critical point. Now that Goldman Sachs may be in trouble for too much success from its quant trading, the market may be acting more naturally. And the natural way seems to be the path of least resistance right now, which is down.

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