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Tuesday, October 9, 2012

Daily update 10/9

That turns the short term trend to down again.  Lets look at the daily SPX chart.

SPX is back below the 18 SMA again.  The bulls really wimped out on the retest of the Sept. high.  Both the NASDAQ and the Russell2000 have taken out their last swing lows.  This looks like a short term top in conjunction with a big picture top.  I think it is time to sell rallies again.  Lets zoom in to the 130 minute SSO chart.

We do not have blue bars on this time frame so we are not extremely over sold yet.  We could easily keep dropping depending on the reaction to the earnings reports.  Breaking the late Sept. low will confirm the short term double top pattern.  If that happens it should set up a test of the key support line in the 59 area.

Keep in mind that this earnings season can easily kick up the volatility level.  It won't be about the 3rd quarter earnings since we already know those will be poor.  It will be all about what they say for the 4th quarter and beyond.  Be very careful holding any stock through its earnings announcement.  The earnings weakness seems to cut across many sectors.


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