Wednesday, February 25, 2009

Major world markets may crash alltogether in two weeks.



I have readings similar to those I got in August / September 2008. As you know, I have been talking about this terminal sell off since SPX 900-950 level but instead we got a slow motion sell off (only 200 SP points so far). In the last few weeks, several significant developments took place in major world markets including US. We have been consolidating under the important trends that will likely push prices lower over the intermediate term.
However, from here on, markets will likely accelerate to the downside at very fast fashion. It will have to be somehow faster than October 08 event by nature... unfortunately.
This may all take, unlike October 2008 sell off, one or two days, or it may be something like October 1987 event.

There is an intermediate term trend line passing through 750-755 on SPX and obviously it can not be taken out intra-week. What is most likely to happen is that , we will probably close around 750 on one of Fridays to open below that trend line with a sizable gap, probably on the following Monday. It may trigger the event or it may not. Hard to fine tune the timing at this moment. BUT dont forget that it gets darker before the dawn. For a healthier market, perhaps for another bull market, this has to happen.

Since this will likely be a terminal move, since it will be harder to predict the exact moment, I insistently stay short SP from 757 and higher. Plus several domestic and European banks.
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