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I’ve made no secret of my enthusiasm for Overstock as a short, such as my posts from January 26th, March 1st, and March 14th. The stock has lost nearly HALF ITS VALUE since my first suggestion (see tint on chart below), and I believe it will be in the teens before the tumble is complete.
Index after index, ETF after ETF, I am seeing the same thing: (a) a trio of lower highs, indicating the bulls are slowly losing their grip (b) a short-term supporting trendline whose fate should hopefully be determined by Friday;s close (that is, break or save).
Today has been a choppy in-between day as SPX/ES has tested strong support and, so far at least, failed either to convert it to resistance and continue down, or rally strongly from it. However we are likely to see one or the other of those soon and I’m surprised that the process has taken as long as it has so far.
On the bear side is SPX filling the gap from 2738.97 that I was looking at yesterday. As I write the LOD on SPX is 2741.47, almost there, but there are no prizes for almost here. That gap needs to be filled to open the next target areas down. Our lean is that should be the way that SPX resolves out of this inflection point. (more…)
