12. August 2009 21:20
Many apologies for the radio silence. I do have a good excuse which I'll tell you about a bit later in this message.
In the meantime we need to look at the major charts and see what’s happening.
First, let’s look the S&P 500:
About 2 weeks ago we had a nice bull flag that took us up around 30 points from around 980.
But now we have a bull flag failure from Friday and now we’ve just penetrated Thursday’s low. If you have any bull flag trades still on, tighten up your stops.
Now let’s look at the Nasdaq:
Same story here ... Thursday’s low has been taken out and we’re still lower than Thursday’s low. That is bearish.
And finally how about the Dow:
Well, this is a bit different as Thursday’s low is still holding. When all three of these markets capitulate, then we should be in for a good ride down.
Folks, we’ve had a great run up, fuelled by what I consider to be spurious reasons and an unspectacular earnings season. My instinct is telling me that we’re due a big run to the downside and I don’t want you caught with your pants down if you're currently long. There are still more bull flags out there than bear flags, but just be patient for the bear flags to form. If we are going down, then there'll be plenty of opportunities.
That's my gut feeling about what's happening. If I'm wrong, then you'll at least be safe in the meantime. But at some point this bull market charade will have to stop.
Talking about gut feelings, the reason for my slight distraction is that I’ve been working on something of a personal matter that could be of major importance to someone you know. As you may be aware, many years ago back in 1994-95 I was hit by a nasty illness of the lower intestine, from which I managed to be completely cured even though the so-called experts say there is no cure. Well, I’ve just released my book, Your Gut Feeling and website, www.yourgutfeeling.com. If you know anyone who’s suffering from Crohn’s disease, ulcerative colitis, or even IBS, this can be of enormous help to them. The review on Amazon is a good demonstration of what I can do.
All the best