Markets got slammed early in the morning. S&P issued a warning that if this rate of debt continues the AAA rating of US debt will have to be reviewed. They did not lower any rating. But markets interpretation was little different. SPX was down 25 points a little after 8 and dow was down 240 points. Classic climax. The markets slowly rallied to 50% of the range and that is where they closed. SPX and RUT both made lower low. RUT's low of 816.5 was close to previous low of 816.07 but spx 1st low was at 1302 and today was 1294. However 1294 is a significant support
Bottom line today was a big fake out and we should on our way. That is what I see. Should we get a lower there is strong support at 75. At the same time should spx gp lower than 1249 it will be a new ball game.
Couple things as markets gets wobbly it is not unusual to see new theories of how every one has a predictor of future. I have to pinch myself and ask if there is one why would someone put it in the open on Internet and once a lot of people know it how can it be a predictor. They also said what is good for GM is good for the stock markets. GM went bankrupt stock market still is flying high. These are independent variables and movement of one has little or no effect on the other. If a butterfly flutters in the amazon's it really does not cause a stock market to go up.
Secondly when I find a site making claims that since a statistical indicator did this a second event should happen on the price I always look deeply in the charts and ask how many times did event B occur after event event A occurred. If I get a 65% then that is a good conclusion. Because I can still get 1 in 3 right. See when I win 2 twice and lose once I still only win net once in 3. Without serious numbers to support it is only a good story.
I am bullish and will be watching lows very intensely.
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