frank friday, page-8

BM - I still can't get my head around "literary cunnilingus", or should that be tongue?

The good news: today wasn’t as bad as yesterday. :)

In America:

SP500 -1.22%
Dow Industrials -0.94%
Nasdaq100 -1.54%
Dow Transports -0.97%
Russell 2000 -1.35%
Comment: The day started with a small rise. It wasn’t enough to suggest that the bulls had any strength – rather a staggering bull before the matador delivers the coup de grace. It was all down hill from there. Like the previous session, the major indices sold off quickly right at the end.

NewHighs/NewLows 59/77. NL>NH. The ratio of NH/(NH+NL) is at 43.4%. Out of the Do Not Sell Zone. New Lows are now registering panic selling. We might have to see a ratio below 20 before the selling abates.

Technical Comment on the SP500:

The SP500 finished at 1377.51. Support/resistance: 1365/1419
MACD Histogram. Below zero. Negative.
MACD. Below zero. Negative.
RSI.9 is at 28.1. Oversold.
Stochastic. 16.6. Below its signal line. Negative
CCI.14: -189.8. Oversold.

Indicators are low enough to suggest a bounce is probable. But until we start to see major divergences on the indicators, it’s unlikely that any bounce will become a sustainable reversal of the trend.

The medium term trend is down. The short term trend is down. Long term trend (from October, 2011) is now in doubt. The Nasdaq100 and the Dow Industrials are both below their 200-Day MAs, and SP500 is close. The current fall is looking more like July, 2011 than May, 2012.

Taking that as a cue, here’s another chart of the SP500. This time concentrating on chart patterns:

The oblique up trend support line has broken to the downside. That was the lower edge of an expanding wedge (bearish). Chart patterns don’t always play out as expected, but this is suggesting a move down to somewhere in the 1310-1340 region.

I guess that’s the bad news. :(

Redbacka