bad news on wall street - thursday, page-7

N-A-S-T-Y. I think that word best describes the candles left behind in New York overnight. Combine that with the fact that the SPY and Q’s were still outside the upper bollies and everything being very overbought, then I am fairly confident that we have seen the high. But one can never be 100% sure of anything in the market and perhaps we might just have a little correction and then head up again to get closer to 1920, but I must say that I think the chances of that are getting less and less each day. My preference, as I mentioned yesterday, is a downside break. I think I will get the opportunity to review the SPX at 1850 and I would think we might then be looking at around 1720 and maybe back closer to the old tops at 1500. But one step at a time for now.

Volume was still high in gold although not to yesterday’s extreme but that is understandable on the second day of selling. As I have mentioned many times, I was looking at any downside break in gold as a cleansing situation with the likelihood that it would be a false move. Like the SPX – nothing is confirmed yet but so far it looks a reasonable suggestion and it did pickup a return line last night at its low.

I have to do some more work on where I think the next time line might come through. At the moment I suspect late August. That would be a nice fit for a correction.

Of particular interest will be the cash position when I get the results from the Geniuses tomorrow. Last week they had a surprising amount of cash – enough to push things through to new highs - but I suspect that will have mostly gone by now.

Didn’t like that downturn in oil overnight. Bit of a shame as that section here has been showing quite a bit of life here – helped of course by a bit of M&A action.

And then just to scare the living daylights out of me, I just realized this morning why my darling XTL index has been making heavy weather of it – it has been hitting its head up against the midline of a fork formed in the first half of 2013. In the last couple of weeks it has hit it eight times. I think it might now go looking for the bottom tine of this fork – I could almost hear my chart telling me – see you at 3350