ugly! but uglier ?

It was ugly. The charts of DJIA and SP 500 un-mistakenly showed that.  For the first time of long time, both indexes are deep in the oversold territory.   Out of NASDAQ 100, only 14 are still above their 50 day’s MA and 31 of them made new low in a month.

 

Is this the low of short term?

 

Well, it is hard to say for sure, but it is safe to say that it is closer to the low J

 

What about tomorrow?

 

After 3% drop in a single day, I will not be surprised to see the market open higher, however, it is hard to say that the market will close higher.  Back in Jan. – Mar. time frame, the market has been closed lower almost every Friday, actually, there is a trade back then to short the stock on the close of Thursday and cover at the close of Friday.  So, it is a day definitely needs a lot of alertness.

 

If current decline of the market is mainly attributed to the fear of inflation, then, we may have further to fail unfortunately.  FXE seems about to break resistance at 158 and oil could head higher before to be in the overbought territory.

 

Yet, this is not an extremely feared market.  The volume was not particularly impressive today and the $VIX is at merely 24.

 

Of course, one has to have the conviction of his analysis at this very volatile market.  I am impressed by David Einhorn, he suggested short LEH at 40, in less than a month, he should made 50% gain. Not bad considering how bad the general market was doing.  Especially he published his research.