Gone are the days in which I wear a sandwich board reading "S&P 600 Is Next!" in the public park. As firmly in control of the market as our bullish breathren are, we have to take things a single ES point at a time. And don't even get me started on the NQ, which evidently was preplanned with all the elegance and sophistication of a six-inch plastic ruler from a second-grader's backpack:
The past several evenings, I've gone to bed worried about what the next day would bring, and each day, things turned out all right. Three years of a Fed-fueled bull market will do that do a soul. At this point, I think we've got a very good chance to seeing 1370 and – – perhaps – – 1350. (I say again: pretty sad, isn't it? I am offering these up as HOPEFUL short-term targets, and it wasn't that long ago that I would have been astonished at anyone who suggested we would ever even reach such levels on the way up).
Zooming in to the intraday level, you can see these two targets with different rationale. That 1390-1410 range gives us a nice measured target of 1370, so that's kind of the easy goal; I'm not sure what will give us that extra 20 points on the ES, except perhaps a nuclear holocaust.
Next up in our tally marks for the bearish case is the Dow 30, which broke its ascending trendline nicely on March 6 and has repeated the performance again today. Of course, we saw just how spectacular a plunge took place after the March 6 break (e.g. none: the market zoomed to even more insipid levels). {Oh, speaking of insanity, did you read about the $200 million the New York firm got for its little drawing program? They launched a game six weeks ago, and bang, Zynga bought them for a fifth of a billion bucks.}
The broker/dealer index provides another piece of evidence that things have pooped out for a moment or two.
Perhaps the most exciting chart for me remains the EUR/USD, which is my largest short position. The daily perspective has consistently providing a very compelling bearish picture.
Zooming in to the minute-bar basis, there is a gorgeous – gorgeous, I tell you! – diamond pattern (which I believe S.B. pointed out in a post, but I saw this even before reading that post, Honest Injun).
A good signal, I think, to get out of equity shorts (again……..) would be ZB recapturing 139 or thereabouts. I would shed a tear having such a short-lived fall in the market, but sticking around just isn't profitable these days.
And with that, I bid you adieu and hope for another drop – – anything, really, it doesn't have to be huge! – – on Friday.
