In my previous posts I have been warning about the European debt crisis and their ineffective treatment of the cancer that is spreading daily will cross the ocean to us and today we get a warning. I have been writing about this since the middle of October.
In any case there is still time to take money off the table or go short. Lets look at the banks because they have been in trouble and the banking index chart looks uglier by the day and yet bullishness of the investors is at the highs of the range. This is an extremely bearish development.
Bullishness is high, the MACD is crossing down and there is a long way to go downwards.
On the 6-month chart for the banking index we can see that the banking index is perched on important support at about 38 at its 50-day moving average. While this support could could yet generate another minor rally towards the resistance shown above, it is clear that we are now at a critical juncture and failure of the support would be expected to lead to a sharp drop.
 |
| Ditto for BPSPX, bullishness high end of range, MACD crossing over we are right at support, we could get a one or two move up followed by a major down leg to 1100. Asia will be down big overnight and the futures will plunge at the open. A close below 1220 would be extremely negative. |
No comments:
Post a Comment