Haven't made many TA predictions lately as it seems every call for a serious pullback when on the ropes winds up with much egg on one's face. But I will say that I saw this one coming as we trade in what I call a "longer term/bear rally since March/ uptrend with range trading gyrations". How's that for stock terminology ?
I could see last week that this market was running out of steam and needed to blow off some of the froth built into higher than expected earnings that sooner or later had to disappoint. Toss in some declining US consumer confidence numbers,Goldman Sachs calling for a lower GDP number (how do they always know ? hmmm),and month end profit taking and you have a correction in a hurry.
We all know the script now, a rising US dollar when on the abyss sees gold,oil prices and stocks get whacked til the buyers slowly step back in.
My main point here is my charts that I use on www.stockscores.com are showing another day or two more of a pullback on the SPY as the TA signals begin to touch the bottom. 102 looks like the next support line.
The question will then be whether or not we tread water sideways for awhile after this froth has been blown off. Barring some geopolitical event, I am thinking we will flatline/range trade rather than any further moves down as the upside expectations seemed to be maxed out for the time being. But as always one has to expect the unexpected as tax loss selling season upon us.
http://www.stockscores.com/quickreport.asp?ticker=spy&x=13&y=15
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