weekend summary

anyway...

the usa signs of technical weakness: volume, divergence between 10yr yields and spx, overbought weekly tick, neg divergence between consumer discretionary and spx, neg divergence between transports and spx (and dow transports and dow), neg divergence between banks and brokers vs spx, outperformance of dow vs spx, failure so far of rsi to break back through its downtrend line.

Bullish signs: price, weakening yen, perhaps the spx bullish percents. The spx bullish % indicator says that when the bp's drops to below 30 and then rebounds 6% then its a buy signal. It actually dropped to 33% and has rebounded to 50%.

Summary: there are signs that this rally may be a bounce from oversold in a continuing larger decline. The weight of evidence suggests this. However, it doesn't pay to pre-empt the index trend given the weight of liquidity injections we've seen from fed and yen. The critical technical thing I'm watching is the downtrend line on the rsi. A break back above that line may suggest a new index high in the offing. A kiss and fall will be my confirming short signal. On the fundamentals, I'm mainly watching banks and brokers. Significant firming by them may signal a more bullish market, continued weakness .... Trading tactic is to revert to shorting at highs at major resistance, complemented by shorting of major range breakouts down.