It is evident that my call for a bottom around 1300 and for the major trendline to hold (on the log scale) has been proved wrong. I don't have anything to add that isn't being said somewhere else.
My only two cents are that I believe the market will react very strongly to any news that beats expectations and may even react strongly to in-line news, given the recent string of disappointments. Note, Ben Bernanke speaks tomorrow at 3:45 PM.
My third cent: the market has been trading in a range since February. When markets are range bound, the technical relationship between moving averages and prices become muddled. As such, I wouldn't give much weight to prices "breaking" above or below shorter term moving averages. My guess is that only a move to a 200 day moving average would provide a valid technical signal.
Edit - June 7, 2011
When I wrote, "My guess is that only a move to a 200 day moving average would provide a valid technical signal," that would implicitly be a buy signal. Just making it explicit.
Monday, June 6, 2011
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