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I’m sure this is going to be a common theme over the weekend in the blogosphere, but I’m going to chime in with my two cent perspective on market sentiment. Despite the market hitting a new bear market low, there doesn’t seem to be any panic. Sure it didn’t feel good watching the market drop like a rock at the open, but it’s ensuing ebb and flow throughout the rest of the day almost felt orchestrated. Not only that, I actually thought for a moment we were going to rally and have everybody head into the weekend with a “feel good” attitude going into next week.

Yes we are oversold and run the risk of a melt up, but nothing in the charts suggest we have to go up. In fact, the charts remain extremely bearish and I expect us to continue moving lower until we get some type of capitulatory trading bottom. I would be very suspicious of any rally, until we get a good wash out of any longs that have held through this drop. There are still many people trying to pick a bottom here that I think are going to get burnt in the downdraft. I even ventured on the long side at one time today, but quickly exited when I realized that it wasn’t a smart trade.

Below are some of the secondary indicators I’m watching to determine trader’s sentiment. Also, only 70% of today’s volume was on the downside, which is not a very high number at all.


Look for a spike above 1.10 for a healthy dose of fear.


Below on -1000 would be a nice reading here.


I’m not going to put a target on this, but any spike over 1000 should be a green flag.

6 Responses to “No Fear”

  1. newbie Says:

    Off topic I know, sorry, but did anyone notice the action in the REITs on Friday??? Take a gander at the chart for IYR…what's going on folks? I don't see any comment on it any where, which usually makes me feel a bit more bullish than if everyone noticed and made a big deal out of it. Looks like a big deal to me, so it probably IS NOT ONE…LOL and this should be another interesting week in the markets to watch.

  2. carrie Says:

    Usually Reit's stocks will go up one year earlier than the real estate market . When I saw SRS drop last Friday, I bought PSA ESS VNO FRT EQR ELS BXP, but sold them all before closed. All of them daily charts are looking good for rebound but weekly charts are ready for a big drop. I guess Reit's stocks will short term rebound and then drop again. If that rebound can change the weekly charts, we might have the chance to buy Reit's stocks and keep them longer.

  3. carrie Says:

    When I bought REIT stock. I posted to chat room.
    t ohttp://sharptraders.cbox.ws/

  4. newbie Says:

    Looks like you traded it just right Carrie. Congrats.

    Jeff, the more I read this blog, the more I like it.


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