Will The New Downtrend Stick?

During this amazing rally since March there have been several head fakes to the downside and the million dollar question is if this current pullback will lead to something significant.  At the current point the short term uptrend has been broken, but we have not changed the NHF sidebar portfolio yet to start shorting the SPY.

There is definitely a potential for a very large pullback based on technicals.  We have not seen monthly stochastic levels this high since the very beginning of the stock market thrashing back in 2007.  Below are three charts showing these technical items of interest.

click full post to check out charts……..

Starting with shorter term.  This is a 6 month daily with 25, 50, and 200 day MA and stochastics.  I put in the support lines as well.

spy-9-24-09

Next is a 2 Year weekly chart.

spy-9-24-09week

Last is a 3 year monthly chart.  This shows the enormous potential for downside with the stochastics all the way to the levels not seen since 2007.

spy-9-24-09month

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13 Responses to “Will The New Downtrend Stick?”

  1. Looks like RIMM is going to help the downtrend cause!

  2. Wow! I can’t believe the potential downside after looking at the monthly charts thats kinda scary…. but makes sense given the basis of the rally

  3. By the way you guys haven’t been posting as much … what gives?

    • Ha.. Well the trend was trucking along for our sidebar portfolio and there were times when some posts could have gone up, but didn’t really see the point in joining in on making noise… enough sites out there are endless verbal diarrhea. Also have been working on some new items for the site and possibly another revamp.

      Thanks for checking in! ha

  4. Hitting that $104 today… lets see what its got

  5. Today was a nice bounce off that $104

  6. Testing that $104 again today

  7. Alright looks like the downtrend is confirmed now. Will be starting to make the moves. Hopefully this time it isn’t another downside head fake. Usually like to give the change a couple days to avoid getting caught in a reversal.

  8. Once it went through that $104 support it got down to the $102 quick. Now the market is sitting right on its 50 day moving average. I would expect a dead cat bounce here.. we will see.

  9. Alright going to use todays little bounce to rotate short on SPY selling at $103 and shorting. Hopefully this downtrend sticks.

  10. Agree with the down trend. RSI broke below 50 as well last week. Question is, how long do we expect this to last. Some real earnings questions linger…we have had pretty bad earnings the last 2 quarters that sent the markets skyrocketing due to rhetorical arguments that don’t hold their weight in water. For instance, none of the banks actually made money last quarter, besides JPM (not counting the IB firms). Citigroup actually sold Smith Barney to post a profit. Can we expect the market to rally off this BS again??? Are we expecting “real” earnings this time instead of cost cutting? Will the world economy pick up the dead American economy (Google/Apple/Cisco/etc making money overseas to grow profits)?

    The seasonal earnings storm is coming…any opinions would be helpful. I personally think CIT going under is another fire that may burn brighter than we think…

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