We are at the 50% retracement level from the August to October runup. As of a few minutes ago we are a bit below 50% and have broken through the down trendline of the retracement pattern.
The last hour yesterday looked like capitulation selling. bid/ask and tick volume did not move near as far for the last down movement as they did earlier in the day, and b/a and tick volume were diverging by the end of the day, and are today too.
As of now it looks like a bounce. But, how much of one I don’t know. I don’t believe we will see new highs for awhile.
It’s not a big deal till we hit about 1420 on the S&P. If we break that we will break thru the 4 year trendline of the monthly chart current bull market. Then it could get serious.
SO, if we break the 4 year trend line in the S&P, then with the US economy so shaky now, trader, brokers etc., know its overvalued and sell off? I love FR in that a lot ove finance folks are on hear & I've learned quite a bit from laymen explanations and then research on my own....not from some by the book college professor.
The S&P has made 3 assaults on its’ high, and failed each time. The latest failure, coupled with GM’s big loss, the worry over the FED being boxed in, and oil prices, has triggered the selling. Stock are cheap compared to bonds, so downside should be limited, barring some really bad news coming out. I think we stay in a trading range until the market feels like all the bad news is out re the subprime losses. I’ve got a 10 year horizon, so I’m just watching, but I’m also heavy with cash.
The Denver real estate market seems to have hit bottom and started improving over the last few months. Colorado resort real estate is hot. It will be interesting to see if this spreads and becomes a regional upturn. Colorado went flat while the boom was still going elsewhere, maybe Colorado is a leading indicator coming out of the downturn.