As you can see, the now famous wedge on the S&P ($SPY) broke with authority on September 22, went back up as it retested the 50 day moving average then collapsed again, took out 1120 and believe it or not 1100 yesterday. I did some work over the weekend and what may happen, you can find it here and here.
Right now the market is a mess, and although we have taken out short term support levels (1100-1120) we find ourselves lower, yet again. in the pre market. No bounce yet, one may start brewing later, so be nimble.
Goldman $GS is out this morning with big downgrades to the commodity sector. The Apple ( $AAPL) iPhone is set to be released today, even though the chart looks like it could tag $ 355. A solid market rally could reverse that though. APPL is the greatest company on earth, but its one curse is its liquidity. When hedge funds need liquidity they hit what’s liquid. We have been seeing that for weeks now. Nothing is exempt, not even AAPL.
Germany is down 3.5% right now as the overseas drama continues. Some day it will all fade to black, but not yet. American Airlines $AMR hit the rumor mill as a bankruptcy candidate yesterday and Morgan Stanley ($MS) is starting to trade like Bear and Lehman before their day of reckoning.
Things always look horrible right before a turn and my target for the S&P is still 1040, but rarely do things go straight down. You just never know if this time is different. Good luck today and don’t get caught leaning the wrong way.
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Joe