Tuesday, January 13, 2009


Just another quick update…

REITS and the XLF, which were lagging yesterday are making up ground today, IYR is up 3%, and the XLF is up 1.5%...

Sound great? Well, yesterday they both triggered new breakdowns and bear targets. Once those levels are exceeded, the targets don’t go away with a pullback above the breakdown point UNLESS there’s a breakout higher.


The market looks range bound down here right on the same old blue triangle line in the 870 area. I see a potential bear flag here on the 10 minute SPX chart. We are approaching overbought on the 30 minute stochastic but are still oversold on the 60 minute. That would be crosscurrents and I will wait for alignment prior to entering again.

The bond market is lower, but is drifting in its flag. As long as we stay in that flag, I’m short TLT hoping for it to break down (for my trade, not for what’ll happen if it does).

The RUT is leading for now, the DOW and S&P are having trouble getting traction to break above their respective 71.8% retrace points. Remember, they broke beneath their 50 day moving averages, so those will now be overhead resistance again, although the NDX and RUT have managed to get above them for now. Market still looks heavy to me, but the daily fast stochastic is approaching oversold, so I would expect that something’s going to move in the next few days here.