From March to earnings season this month, we've gone pretty much straight up with only slight dips. But with the negative divergences of breadth and the weakening of the financials to overt dollar bearishness, we hit a top. I see very little chance of us piercing those highs we made last week. Yes, last week! We were at a new 52 week high last week on the SPX and I don't think we'll be seeing those again till next year.
The key now will be to find ideal short entries and cover when the longs puke out their shares on sharp selloffs.
Those failing to make the adjustment to this new market will get crushed buying dips and chasing rallies as stocks trend lower. I believe we'll stabililize on Monday, but I am sticking with the trend till at least 2:30 pm EST. At that point, I'll reanalyze the situation.
Friday, October 30, 2009
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