Wheeee, what a ride!
We're up, we're down and over and out – but That's Life in the markets, right? Life is being good to our Short-Term Portfolio, now up 59.2% for the year as we caught the bearish move very nicely. Because our STP was up, we have, so far, been able to ride out our long-term positions but we're certainly concerned about a major breakdown possibly in the works.
As noted by Dave Fry in his SPY chart, that 50 dma is a big point of contention now and of course we're going to get a bounce off a line like that. In fact, the new lows we hit at the end of the week led us to recalculate our bounce lines for this week and now we are looking for:
- Dow - 17,000 (weak) and 17,100 (strong)
- S&P 1,975 (weak) and 1,985 (strong)
- Nasdaq 4,475 (weak) and 4,500 (strong)
- NYSE 10,760 (weak) and 10,820 (strong)
- Russell 1,125 (weak) and 1,140 (strong)
We weren't too convinced by Friday's low-volume rally and we aren't going to be convinced by anything that happens on the last two days of the month (window dressing) but clearly any failure of those weak bounce lines is going to have us racing back to some bearish bets into the start of October (and earnings season).
Speaking of earnings - the CEO of Macy's, Terry Lundren is not too enthusiastic about Q4. After reporting weak Q2…
